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Tuesday, October 15, 2013

ZEW Economic Sentiment - forex trading.

A monthly economic survey. The ZEW Economic Sentiment is an almalgamation of the sentiments of approximately 350 economists and analysts regarding the economic future of Germany for the next six months. The survey shows the balance between those analysts who are optimistic about Germany's economic future and those who are not.

'ZEW Economic Sentiment in details'

The ZEW - Zentrum fur Europaische Wirtschaftsforschung (Center for European Economic Research) - Issues monthly economic reports for Germany, Switzerland, and the Eurozone.
These Economic Sentiment covers the economic futures of several other countries as well. This survey includes analyst opinions for Europe, the UK, Japan and the U.S. An index value greater than zero indicates optimism while a value below zero indicates pessimism

This indicator comes out once per month.  It has two components. The first component is called ZEW Economic Sentiment, and the second component is called ZEW Current Situation.

There is a German firm that surveys business authorities in all business industries, and it asks them questions about their current assessment and future outlook on German economy.
The questions about the future are compiled into ZEW Economic Sentiment, and the questions about current situation is compiled into ZEW Current Situation.

Germany is the country that has heaviest impact on Euro Zone, so naturally depending on how German economy is doing, traders speculate by trading Euro.  Since trading is based on predicting the future, ZEW Economic Sentiment is what matters the most to traders. When it comes out better than expected, it signifies healthier economy, so traders tend to buy EUR/USD, and it subsequently goes up. When ZEW Sentiment comes out worse than expected, it signifies a weaker economy, so traders tend to sell EUR/USD, and it subsequently goes down.



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