Euro Slips as ZEW Economic Sentiment Declines Sharply

The euro fell against most its major rivals (though not against the weak Great Britain pound) on Tuesday as the ZEW Economic Sentiment for Germany was rather disappointing.

The ZEW Indicator of Economic Sentiment for Germany dropped sharply from 5.1 in March to -8.2 in April. While analysts had anticipated a decline into negative territory, they were still expecting a far better reading in neighborhood of -0.8. The report explained the deteriorating sentiment by the following reasons:

The reasons for this downturn in expectations can mainly be found in the international trade conflict with the United States and the current situation in the Syrian war.

The indicator for the whole eurozone did not fare much better, falling from 13.4 to as low as 1.9. It also failed to meet expectations, falling short of the median forecast of 7.3, though stayed in the positive territory.

Now, traders wait for the release of the final revision to March eurozone consumer inflation at 9:00 GMT tomorrow. Experts predicted the same 1.4% reading as in the flash estimate.

EUR/USD slipped from 1.2379 to 1.2370 as of 21:00 GMT today. EUR/JPY declined from 132.58 to 132.36. At the same time, EUR/GBP rallied from 0.8633 to 0.8656.

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