The German ZEW Economic Sentiment Index soared to 31.7 in March, surpassing market expectations and indicating a significant improvement in economic expectations for the country. The Eurozone ZEW Economic Sentiment Index also saw a notable increase to 33.5 in the same period.
Despite the upbeat ZEW surveys, the EUR/USD pair remained uninspired, hovering near intraday lows near 1.0840, down 0.28% on the day. This lackluster reaction may be attributed to the assessment of the economic situation remaining at a very low level, somewhat overshadowing the increased economic expectations.
More than 80% of those surveyed anticipate that the European Central Bank (ECB) will cut interest rates in the next six months, which could explain the optimistic outlook for the German construction industry. Additionally, the German export sector is expected to benefit from increased economic expectations for China and the anticipated depreciation of the dollar against the Euro.
Overall, the positive ZEW surveys reflect a growing confidence in the economic outlook for Germany and the Eurozone, despite the subdued market reaction in the currency markets.
