Talking Points:
- The Euro was little changed versus the US Dollar
- Euro-Zone ZEW Survey economic sentiment drops to 30.1
- German ZEW Survey economic sentiment drops to 1.9, below expected
The Euro was little changed versus the US Dollar after today’s Euro-Zone ZEW Survey showed financial experts throughout Europe are less optimistic about the economy than the previous month. The Euro-Zone’s sentiment figure came at 30.1, below the prior 33.3. The German ZEW Survey Economic Sentiment number, which deals specifically with the German economy dropped to 1.9, below economist’s expectations of 6.0, and below the prior 12.1. The number signaled the seventh consecutive drop in sentiment since the figured topped in March. The German ZEW Current conditions Survey also saw a drop to 55.2, below expected 64.7, with the prior release coming up at 67.5.
The ZEW survey asks financial experts to make a medium-term forecast about the economic situation. The deteriorating report suggests sentiment is waning in the Euro-Zone. ZEW said that the main reasons for the drop in Germany are the Volkswagen scandal and weaker growth from emerging markets. However, ZEW commented that the German economy is performing well and the Euro’s economy continues to recover, thus it is very unlikely that Germany will slide to a recession.
Currency Strategist Christopher Vecchio identified ECB policymakers’ speeches as the main driver for the Euro this week, as a way to possibly clarify the ECB’s forthcoming moves.
