-Andreas Scheuerle, an economist at Dekabank
Germany has been one of the main locomotives of Europe's economy in the recent years and mostly, due to the resilience of German economy, the 18-nation's bloc emerged from the recession last year. The latest fundamentals are sending worrying signs, as exports and industrial production came below analysts' forecasts. Additionally, Ukraine crisis weighed on consumers' and companies' morale. Optimism about the future of Europe's largest economy damped further in May.
The single currency continued its depreciation on Tuesday, with EUR/USD falling to 1.3740 immediately after the release of the data, penetrating daily S1. The ZEW Center for European Economic Research said a gauge of analysts' and investors' morale, designed to predict economy's performance over the next six months, plunged to 33.1 in May from 43.2 a month earlier. This is the fifth consecutive monthly fall, and below analysts' expectations of a 40.0 reading. Surprisingly, the measure of current conditions climbed to 62.1 from 59.5 recorded in April. The Bundesbank has already pointed out economic expansion will decelerate this quarter after a solid footing in the beginning of the year. The economic output will most likely rise 0.7% in the three months through March. The report will be unveiled on May 15.
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