Forexpros – German economic sentiment deteriorated for the third consecutive month in July, as concerns over the euro zone’s ongoing debt crisis continued to weigh, industry data showed on Tuesday.
In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment fell by 2.7 points to minus 19.6 in July from June’s reading of minus 16.9.
Analysts had expected the index to decline by 3.1 points to minus 20.0 in July.
The Current Situation index fell to 21.1 in July from 33.2 in June, disappointing expectations for a more modest decline to 30.0.
On the index, a level above 0.0 indicates optimism, a level below 0.0 indicates pessimism.
Meanwhile, economic sentiment in the euro zone remained in negative territory for the third consecutive month in July, dropping by 2.2 points to minus 22.3 from a reading of minus 20.1 in June.
Economists had expected euro zone economic sentiment to decline 7.9 points to minus 28.0 in July.
Commenting on the report, ZEW President Wolfgang Franz said, “The decline of the economic expectations concerning the end of 2012 is flattening out gently. This could possibly be an early sign of an encouraging development in 2013.”
“However, risks should not be underestimated. Besides the weak demand from the euro zone for German exports, the German economy is also burdened by weakening growth dynamics in other important partner countries,” Mr. Franz added.
Following the release of that data, the euro remained mildly higher against the U.S. dollar, with EUR/USD rising 0.23% to trade at 1.2299.
Meanwhile, European stock markets remained higher. The EURO STOXX 50 added 0.7%, France’s CAC 40 rose 0.65%, Germany’s DAX climbed 0.55%, while London’s FTSE 100 eased up 0.1%.
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