Forex: European Economic Sentiment Index lower than expected

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The Centre for European Economic Research released the index on the Economic Sentiment which compiles data from across the European Union. The index gave a reading of 19.7 in April, worse than the expected 29.8 figure, and down from the March figure of 31.0.

The data are compiled monthly, and is a survey institutional investors and analysts. It’s a leading indicator if economic health.

Upon the release of the data, the Euro was trading at 1.4439 against the US Dollar and dipped to1.4427 but then rebounded to continue its uptrend. Since the open of the European session, EURUSD has gained over 70 pips to hit a high of 1.4479 just 7 pips shy of Friday’s high.

The Euro was given a boost today after China pledges to support troubled Spanish banks. Chinese Prime Minister Wen Jiabao said to Spanish Prime Minster Jose Luis Zapatero that China is willing to make positive efforts to assist in the funding and restructuring of Spanish banks by continuing to purchase local sovereign debt.

Comments from Wen to Zapatero have helped the EUR/USD hit a fresh intraday high.

EURUSD pared losses from Monday and is nearing Friday’s high, hitting 1.4479. This is the highest level since October 2010. Meanwhile EURGBP hit an intraday high of 0.8901 gaining over 70 pips since opening the trading session.