Euro Adjusts Lower After Major Eurozone Survey of Analysts Shows Negative Outlook

The Euro lost ground on Tuesday after a survey of financial professionals in the region showed a marginally more pessimistic assessment of the future outlook for the economy, whilst concerns  for German exports also weighed.

The ZEW sentiment gauge of “Economic Expectations” which asks respondents to look ahead six-months and consider the state of the Euro-area economy,  fell to 29.3 from the 35.6 registered previously, as the balance of negative responses compared to positive responses rose. 

Eurozone “Current Conditions”, however, rose substantially to 38.4 in August.

“By contrast, the indicator for the current economic situation in the eurozone has climbed significantly. It currently stands at 38.4 points, 9.7 points higher than in July. Since November 2016, the indicator for the economic situation in the eurozone has been steadily increasing and has now reached its highest level since January 2008,“ commented ZEW’s Michael Shroder. 

The ZEW result for Germany alone came out higher for “Current Conditions” at 86.7 from 86.4 previous.

For “Economic Sentiment”, however, the balance fell below expectations to 10, from 17.5 previously, when 15.0 had been forecast.

The fall was thought to reflect fears about the country’s falling exports and the scandal relating to the German automobile sector.

“The significant decrease of the ZEW economic sentiment indicator reflects the high degree of nervousness over the future path of growth in Germany.

“Both weaker than expected German exports as well as the widening scandal in the German automobile sector in particular have helped contribute to this situation. Overall, the economic outlook still remains relatively stable at a fairly high level,” comments ZEW President Professor Achim Wambach.

ZEW is calculated using survey data from interviews with 350 financial professionals and reflects their view of the economy, it is a reliable forward indicator for the economy.

EUR/USD fell from 1.1772 to 1.1757 in the minutes after the release.

EUR/GBP fell four points from 0.9163 to 0.9159, and GBP/EUR fell from 1.0919 to a trough low of 1.0910 following the release.