What is the ZEW Economic Expectations Index?
The ZEW Economic Expectations Index is an indicator of economic expectations from the German ZEW institute, reflecting the opinions of 350 experts regarding economic activity and development over the next 6 months.
ZEW Index helps to display the balance between negative and positive forecasts of specialists. The index value is calculated as a percentage ratio between favorable and unfavorable opinions. It is a leading indicator.
The origin of the ZEW Index is Germany, but the experts whose opinions are considered in the calculation of the index are specialists from other European countries, as well as Japan, the United Kingdom, and the United States.
- Publication frequency: monthly, at 13:00 MSK, in the middle of the reporting month;
- Country of publication: Germany;
- Significance: medium.
- Official website: www.zew.de/en/
What is the essence of the ZEW Index?
Experts report what development they consider most likely — improvement, deterioration, or maintaining the current level. Data for each question is averaged, after which the difference between the percentage of positive and negative responses is calculated (neutral responses are not taken into account). This difference is the indicator. If the indicator value is positive, it means that experts expect an improvement in the situation, while a negative value indicates a negative forecast.
How does the ZEW Economic Expectations Index affect the foreign exchange market?
Since the indicator characterizes expectations about the economy of the Eurozone, the publication of the ZEW Index primarily affects currency pairs with the euro. In the case of an increase in the index, the euro strengthens, otherwise, it weakens. It should be noted that the publication of the ZEW Index has a moderate impact on the foreign exchange market.
FAQ
What is the ZEW Economic Expectations Index?
The ZEW Economic Expectations Index is a measure of expert sentiment about the future performance of the German economy.
How is the ZEW Index calculated?
The ZEW Index is calculated as the percentage ratio between favorable and unfavorable opinions of experts regarding the economic outlook.
How does the ZEW Index affect the forex market?
The ZEW Index influences currency pairs involving the euro, with a positive index indicating a stronger euro and a negative index suggesting a weaker euro.
