Forex Market: EUR/SEK touches two-week lows following downbeat EZ economic sentiment data

The Swedish krona advanced to the strongest level in two weeks against the euro, after economic sentiment data out of the euro zone missed estimates, fueling concerns over the fragile economic recovery of the common currency bloc.

EUR/SEK touched a two-week low at 8.8191 at 10:38 GMT, after which the pair consolidated at 8.8239, losing 0.22% for the day. Support was likely to be received at March 5th low, 8.8130, while resistance was to be encountered at March 17th high, 8.8932.

Economic sentiment in the largest euro area economy, Germany, deteriorated sharply, reaching a 7-month low in March, data by the ZEW Centre for Economic Research showed today.

The ZEW (Zentrum für Europäische Wirtschaftsforschung), reported that its index of German economic sentiment slid by 9.1 basis points to reach 46.4 this month, the weakest level since August, from a reading of 55.7 in February. At the same time, analysts had expected a smaller drop by 2.7 basis points to 53.0 this month.

In addition, the euro area economic sentiment also registered a decline, coming in at 61.5 in March, down from 68.5 in the previous month and as analysts projected the index will decline to 67.3 this month.

Meanwhile, demand for the Swedish krona was pressured earlier in the day, after it became clear that the board committee of Scania AB, recommended its minority owners to decline a bid by the German Volkswagen AG to buy the rest of Swedens truck maker. The board committee of Scania regarded that Volkswagens 6.7 billion-euro offer for the rest of the company too low.

Elsewhere, EUR/GBP fell from a session high at 0.8385, recorded at 8:01 GMT, also the pair’s highest point since December 27th, to trade at 0.8366 at 10:03 GMT, dipping 0.02% for the day. Support was likely to be received at March 17th low, 0.8342, while resistance was to be met at December 27th high, 0.8393.