The Euro is trading at a two-week high, posting gains for two consecutive days despite the zone's struggle with a resurgence of the coronavirus pandemic forcing stricter lockdowns—including the closure of schools in France. Business owners are upbeat. They expect the Eurozone to weather through these harsh conditions in the next six months as per the latest Eurozone Sentix Investor Confidence, which rose to 13.1, easily surpassing expectations of 6.8.
Although vaccines are being distributed, the rate of administration is not at par with expectations. Accordingly, this and lockdowns could, ideally, force the Euro down. However, the opposite is the case. Business owners expect a stronger rebound in the next two quarters, pushing the Euro higher against the greenback, the GBP, and other major pairs. If their predictions come to pass, the pent-up of the past few months would be released, thrusting its economy and Euro higher.
Impact on the Euro:
Bullish. A sharp recovery of the Eurozone economy catalyzed by the easing of contagion measures would lift the Euro to new levels. It would reverse losses of the past few weeks, especially against the GBP—presenting an opportunity for traders.
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