• Economic sentiment in Germany and the Eurozone improved in November.
• EURUSD clings to strong daily gains above 1.0400.

The German ZEW headline numbers for October showed that the Economic Sentiment Index improved sharply to -36.7 in November from -59.2 in October, beating the market expectation of -50 by a wide margin. Furthermore, the Current Situation Index rose to -64.5 from -72.2, compared to analysts' estimate of -68.4. 

The ZEW Economic Sentiment Index for the Eurozone edged higher to -38.7 from -59.7.

Commenting on the data, the ZEW Institute said that the rising sentiment was related above all to the hope that inflation rates will fall soon.

"In this case, policymakers would not have to hit the brakes on monetary policy as hard and/or for as long as feared," the publication further read. "However, the economic outlook for the German economy is still clearly negative."

Market reaction

The Euro (EUR) preserves its strength after this report and EURUSD was last seen rising 0.8% on the day at 1.0408.