Today sees two important news releases for the euro to dollar pair, with the German ZEW figures this morning, followed by the TIC Long Term Purchases in the US in the afternoon. The first is a survey of approximately 350 German institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Germany. A number above zero indicates optimism and below is pessimism with the forecast being -26.5 against a previous of -31.0, which would suggest a slight improvement in sentiment. If the actual is better than the forecast then this is generally good for the currency, in this case the euro.

In the afternoon we have the  TIC ( Treasury International Capital) figures which represent the difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigners during the reported period, and you might well ask why these numbers are important! The simple explanation is that this data represents the balance of domestic and foreign investment – let me give an example which I hope will clarify the situation. If foreigners purchased $100 billion in US stocks and bonds, and the US purchased $30 billion in foreign stocks and bonds,then the net reading would be 70.0B. The market impact tends to be significant but this does vary from month to month. The forecast this time is for +20.0B against a previous of -21.7B. If the numbers are better than forecast then this is generally good for the home currency – the US dollar.