Euro-Zone Economic Indicators

What are Euro-Zone Economic Indicators?

Euro-zone economic indicators is a term that refers to the variety of reports from the European economic zone on the relative health of the European economy. These reports affect the currency trading markets because the strength and weakness of the European economy as a whole determines the strength or weakness of the euro. Because of the many individual countries that make up the European economic zone, there are hundreds of reports that are considered Euro-zone economic indicators. Yet the size of the economies of France, Germany, Spain, and Italy, which account for 75% of the European gross domestic product, mean that special attention is always paid to the indicators from these countries.

The reports that are considered Euro-zone economic indicators cover European employment, prices, housing, wages, interest rates, consumer confidence and sentiment, sales, gross domestic product, balance of payments, and similar topics. Of these indicators, employment and housing numbers often affect the strength of the Euro the least while the pricing reports are among the most significant. This is due to the fact that the European Central Bank is fundamentally concerned to deal with inflation and will raise interest rates when it is clear that consumer prices are accelerating too quickly. Of the pricing reports, economists are especially dependent upon the Euro-Zone Consumer Price Index (CPI) that measures the prices of a typical set of commonly purchased household goods.

The core CPI measures the same thing, but it leaves food and energy costs out of the measurement. The French Consumer Price Index and the German Consumer Price Index are reports of a similar kind to the Euro-Zone Price Index but which focus on those two countries respectively.

Germany’s Trade Balance is another indicator that exhibits a wide and powerful influence on the value of the euro. This report measures the difference between the exports and imports of Germany, which is the largest economy on the continent. Most of the time, a surplus (more exports than imports) in trade with partners outside of Europe will cause the euro to appreciate in value. Other important indicators similar to the German Trade Balance are the Euro-Zone Trade Balance and the French Current Account. The list of other kinds of indicators is almost endless.