22 August, 2017
The ZEW economic sentiment falls short of expectations with a score of 10 points.
Germany's ZEW economic sentiment indicator for the month of August highlighted on Tuesday that German investors feel less optimistic about the outlook for the economy in the next six months, adding to the euro's losses.
Europe's powerhouse economy is expected to hit a setback in the coming months, reflecting a "high degree of nervousness over the future path of growth in Germany".
The assessment of the current economic situation improved slightly in August.
The ZEW result for Germany alone came out higher for "Current Conditions" at 86.7 from 86.4 previous.
"The strong economic upturn in the German economy is expected to continue in the third quarter, with industrial output probably continuing to play an important role, thanks to a substantial expansion in exports", the country's central bank said Monday.
By contrast, the indicator for the current economic situation of the Eurozone climbed significantly by 9.7 points to 38.4 points in August.
Claus Vistesen at Pantheon Macroeconomics said: "Across industries analysts" sentiment for auto makers plunged in line with ongoing chaos surrounding "diesel gate'". The expectations index dropped 6.3 points to 29.3. "Since November 2016, the indicator for the economic situation in the eurozone has been steadily increasing and has now reached its highest level since January 2008", commented ZEW's Michael Shroder. Investors were happy to use recent dollar bullishness to sell the euro.
EUR/GBP fell four points from 0.9163 to 0.9159, and GBP/EUR fell from 1.0919 to a trough low of 1.0910 following the release.
Equity markets, however, remained buoyant.