German ZEW Economic Sentiment Index slumps to 63.3 in July, EUR/USD tests lows


  • German ZEW Economic Sentiment arrived at 63.3 in July, down from 79.8 previous.
  • The ZEW Current Situation for Germany came in at 21.9 in July vs. -9.1 in June.
  • EUR/USD remains pressured below 1.1850 on mixed German and Eurozone data.

The German ZEW headline numbers for July showed that the Economic Sentiment Index worsened more than expected to 63.3 from 79.8 previous while missing estimates of 75.2.

Meanwhile, the Current Conditions sub-index recovered firmly to 21.9 in July as against -9.1 recorded in the previous month and 5.0 expectations.  

Separately, the Eurozone ZEW Economic Sentiment for July fell to 61.2 for the current month as compared to 81.3 previous and 84.4 consensus forecast

ZEW President Achim Wambach said, "The economic development continues to normalize. The situation indicator for Germany has clearly overcome the coronavirus-related decline.  Although the ZEW indicator of economic sentiment has once again fallen significantly, it is still at a very high level.”

“Financial market experts, therefore, expect the overall economic situation to be extraordinarily positive in the coming six months,” Wambach added.

Also, on the docket was the bloc’s Retail Sales, which came in at 4.6% MoM and 9% YoY vs. 4.4% and 8.2% expected respectively.

FX market reaction

The euro showed little to no reaction to the mixed data dump, as EUR/USD flirted with daily lows of 1.1842 amidst resurgent US dollar demand. The spot hit a multi-day high of 1.1.1875 ahead of the European open.

 

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