Commerzbank’s FX Compass Index, which canvasses the opinion of more than 1,000 German importers and exporters every month, showed that sentiment during the three-month horizon turned unambiguously negative towards EURUSD in March. That followed a brief move into positive territory in February, after the second bail-out deal for Athens eased worries over eurozone sovereign debt and the European Central Bank’s long-term financing operation helped lower concerns over the health of eurozone banks.
The proportion of euro bears rose by 10% to 36% in March for the three-month horizon, while the proportion of euro bulls fell by 5%. That took the FX Compass Index to -13, down from two in February and back to the euro bearish view that has dominated since September.
| German companies' assessmet of EURUSD over 3,6,12 months |
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| Source: Commerzbank FX Research |
Alexandra Bechtel, strategist at Commerzbank, says that German companies have proved they have a good instinct for the short-term direction of EURUSD.
“With the exception of August 2011, they were always correct with their euro-sceptical three-month outlook,” she says.
There was also a notable fall in the number of euro bulls over the medium to long term.
During the 12-month horizon, the proportion of EURUSD bulls fell by 12% to 34%, the lowest since September, while the proportion of bears held steady at 29%.
The proportion of EURUSD bulls also fell 5% to 34% over six months, while the percentage of bears rose 5% to 35%, taking the six-month FX Compass Index to -1.