Euro Surges Ahead of ZEW Survey Data Amid Hawkish ECB Sentiment

The Euro has continued its upward trend against the Japanese Yen, reaching around 179.00 during European hours on Tuesday. This rise comes despite rising global oil prices putting pressure on Japan's energy-dependent economy, which significantly inflates import costs.

However, the Bank of Japan (BoJ) may retain support for the JPY due to anticipation of more aggressive monetary tightening by the BoJ itself. Additionally, the ongoing unwinding of global carry trades and signs of domestic investors repatriating foreign assets provide a steady cushion for the currency.

The Euro, on the other hand, is finding firm backing from persistent hawkish sentiment surrounding the European Central Bank (ECB). The ECB has repeatedly warned of lingering upside inflation risks, signaling that additional rate hikes remain on the table following their recent quarter-point policy increase. Leading banks such as Goldman Sachs, Citi, and Barclays are forecasting another rate increase in December, with market pricing echoing this outlook at 94%.