• Economic sentiment in Germany and the Eurozone continued to improve in December.
• EUR/USD trades flat on the day slightly below 1.0550 after the data.

The German ZEW headline numbers showed that the Economic Sentiment Index improved sharply to -23.3 in December from -36.7 in November, beating the market expectation of -26.4. Furthermore, the Current Situation Index rose to -61.4 from -64.5 but fell short of the market expectation of -57.

In the same period, the ZEW Economic Sentiment Index for the Eurozone rose to -23.6 from -38.7. 

Commenting on the data, "the vast majority of financial market experts expect the inflation rate to decline in the coming months," the ZEW Institute said. "Together with the temporary stabilisation on the energy markets, this leads to a significant improvement in the economic outlook."

Market reaction

The EUR/USD pair edged slightly lower with the initial reaction to this report and was last seen trading virtually unchanged on the day at 1.0535.