German ZEW Economic Sentiment Index drops to -14.7 in July vs. -10.0 expected
- Germany’s ZEW Economic Sentiment Index declined to -14.7 in July.
- EUR/USD is battling 1.1000 after the mixed ZEW surveys.
The German ZEW headline number showed that the Economic Sentiment Index fell further in July, arriving at-14.7 from -8.5 seen in June while missing the market expectation of -10.0.
However, the Current Situation Index improved slightly to -59.5 from -56.5 prior, beating estimates of -60.0.
During the same period, the Eurozone ZEW Economic Sentiment Index worsened to -12.2 from -10.0, compared with the estimates of -10.2.
Key points
The ZEW indicator of economic sentiment is shifting even more noticeably into negative territory.
Financial market experts predict a further deterioration in the economic situation by year-end.
Key reason for this is the expectation of rising short-term interest rates in the Eurozone and the US.
Important export markets like China are seen as relatively weak.
The industrial sectors are likely to bear the brunt of the anticipated economic downturn, with profit expectations for these export-oriented industries experiencing a substantial decline once again.
Market reaction
The EUR/USD pair is paring back gains while trading at around 1.1000 on the mixed data, modestly flat on the day.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
