The euro is currently floating at the rate of 1.4004 US dollars. This rate was up by 3.74% from the last week’s trading and reported a staggering increase from last month’s trading and reported an increase by 7.44%.

The euro rose to 1.3625 against US dollar on Tuesday, up by 0.5 % due to surprisingly big improvement in the German economic sentiment. The ZEW indicator rose to 31% in May as compared to 13% in April. This indicator was above economic estimates of 20%. Analysts and investors were surprised at the sudden growth and are forecasting a good near future of the euro zone. Analysts observed that Euro positive reaction to ZEW reports suggested that market participants saw improving sentiment in the euro zone as boosting demand is for risk and not for the economy. The other figures of data still depict a weak European economy. But the gains in euro are a clear indicator of pushing its major counterpart US dollar downwards as some traders unwind the positions in the US economy.

Moreover the prices are not assumed to be constant. Euro stat is expected to report that annual CPI growth in euro zone slowed down to 0.2% as compared to that of 0.6% in March. This would mark a record low for the index, and the big concern here is that the persistent drop in the prices of euro signals how the downside risks are for inflation which could be turned into deflation. The European Central Bank (ECB) has acknowledged that CPI could turn negative for a few months this year, but if they saw the index contract more than one month, then the euro is likely to respond to the index and improve the current scenario. This will see an impact on the growth prospects of the euro zone as well as the housing situation in the European zone.

The euro was set on a steady and aggressive rally against its primary counterpart – US dollar. The drive for this rally evolved with time, from scheduled event risk to general market sentiment over speculation over national credit health. The euro was observed of having gains against major world economies that are trying to maintain stability and are depreciating at a faster rate when measured up to high yielders. This should be considered as a reminder that there are general markets themes and euro – centric fundamentals and the market will follow whichever has greater influence over time.

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