Euro gains little as ZEW sentiment falls short of forecast

Euro steadied around 1.1250 against the US Dollar on Tuesday, having risen from just under 1.1200 to that level, marking the fifth time this month the daily high surpassed 1.1250. The ZEW survey, released in October, revealed a weaker economic sentiment in the Eurozone, falling to 18.5 from a forecast of 24.2. This lower outlook for euro area growth casts doubt on additional European Central Bank (ECB) rate hikes, which would benefit the currency.

The ECB is expected to maintain its deposit rate at 2.50% on October 29, with Danske Bank anticipating one more increase in December to 2.75%, still below the September peak of 3.7%. ECB President Lagarde will speak at 16:30 GMT on Wednesday, followed by ECB Chief Economist Lane, Bundesbank President Nagel, and Executive Board member Cipollone earlier in the day.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is a crucial economic indicator for the currency. If inflation exceeds expectations, particularly if above the ECB’s 2% target, it may prompt the ECB to raise rates to curb it. Strong economic data, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys, can bolster the Euro's value by attracting foreign investment and potentially encouraging the ECB to raise interest rates.