Decline in Euro Area Consumer Confidence to -16.1 in January

Traders responded to the report, causing the EUR/USD to retreat below the 1.0850 mark.  

Highlights

• Euro Area Consumer Confidence declined from -15.1 in December to -16.1 in January.
• The Richmond Fed Manufacturing Index dropped from -11 to -15.
• The poor economic data did not boost gold, which remained stagnant close to the $2025 mark.  

On January 23, traders reviewed the Euro Area Consumer Confidence report and noted a decline from the revised -15 in December to -16.1 in January, compared to the analyst consensus of -14.3.

Euro Area Consumer Confidence has consistently remained below the -15 level since early 2022. The broader trend indicates a gradual recovery after a significant downturn caused by the energy crisis in late 2022 – early 2023.

Currently, Euro Area Consumer Confidence is notably below its long-term average, reflecting the economic challenges facing the European economy.

Following the report, EUR/USD experienced a downturn, with ongoing attempts to settle below the 1.0850 level. Forex traders anticipate a more hawkish stance from the Fed compared to the ECB in the near term, which is seen as bearish for EUR/USD.

In the U.S., traders monitored the Richmond Fed Manufacturing Index report, which revealed a decrease from -11 in December to -15 in January, in contrast to the analyst consensus of -7.

The S&P 500 settled close to the 4860 level in response to the report. Overall market sentiment remains bullish, driven by expectations that AI will enhance profitability across various industries.

Gold is currently trading near the $2025 level following an unsuccessful attempt to surpass $2040. The strengthening dollar and increasing Treasury yields are acting as negative factors for the gold market.