German Investor Confidence Falls to its Lowest Level Since April 2009
• Euro Slips on Portugal Downgrade – Wall Street Journal
• Moody’s Downgrades Portugal – Wall Street Journal
• Portugal’s Credit Rating Cut by Moody’s - Financial Times
• German Investor Confidence Drops as Debt Crisis Threatens to Hobble Growth - Bloomberg
• Greek Banks Bring Rates Below EU Bailout Loans in First Bill Since Crisis- Bloomberg
EUR/USD: German investor confidence for the month of July fell to 21.2 from 28.7 the month prior to mark its lowest level since April 2009. The fall in the ZEW survey of economic sentiment has come on the back of uncertainty ahead of Europe’s stress tests results. As of late, there has been a lack of detail regarding how banks who fail these tests will be dealt, and what banks will actually be included. Meanwhile, the ZEW survey of the current situation in Germany rose to 14.6 from -7.9 in June, while the economic sentiment in the 16 member euro area scaled back from 18.8 in June to 10.7 in July. Thus, market participants believe that the economic activity in Germany’s real economy has improved; the unemployment rate in June remained unchanged from the month prior, which is at the lowest level since December 2008. Nonetheless, across the news wire, Moody’s downgraded Portugal’s debt to A1 from AA2, while Fitch’s Brian Coulton affirmed the “negative outlook” for Portugal, and went onto add that the big challenge for the country remains economic growth. To discuss this and other topics, please visit the EUR/USD forum.
Written by Michael Wright, Currency Analyst
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