Euro (EUR) Exchange Rate: Euro Slumps as German Investor Sentiment Falls to Six-Month Low
The Euro to US Dollar exchange rate fell to a session low after the latest ZEW investor confidence survey slumped to its lowest level in six-months. The single currency also slumped against its other major peers on Tuesday.
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According to the ZEW index, investor confidence tumbled from the 55.7 recorded in February to a six-month low figure of 46.6 in March.
Economists were blaming continuing worries over the tense situation in Ukraine and the deteriorating relationship between Germany and Russia.
Germany was particularly affected by the tensions between the West and Russia as many German businesses have interests and cash tied up in Russia. The cooling in relations over Ukraine has the potential to harm business and investment in the two nations.
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Euro-Zone Consumer Confidence (March 21)
“Sentiment was probably hit by worries about the Ukraine conflict, the strong Euro, the lack of policy easing by the ECB earlier this month and doubts about the strength of the Chinese economy following a string of disappointing data from China,” said an economist at Amsterdam-based ABN Amro Bank.
“Despite its decline the ZEW indicator remains well above its long-term average value and at a level consistent with strong growth of the German economy.”
The report indicated that the economic upswing in Germany is not at risk.
The assessment of current economic conditions improved to 51.3 this month from 50.0 in February. Economic expectations for the Eurozone also deteriorated this month, the ZEW Centre said, dropping to 61.5 from 68.5 in February, compared to expectations for a decline to 67.3.