-Carsten Brzeski, an ING chief economist
After a slew of disappointing data from Germany during the last several weeks, another report suggested that we can see more weakness in the foreseeable future. The single currency was trading in a narrow range moving 0.14% lower after the release of the German ZEW indicator.
A report from the ZEW Centre for European Economic Research showed that a gauge of investor sentiment in Europe's largest economy eased to 43.2 this month from 46.6 a month earlier. Analysts had expected a figure of 45.0, and despite the disappointment, the index still remained highly above zero mark that separates optimism from pessimism. With the indicator at the lowest since August last year, the outlook for the next six months looks not so promising now.
After the remarkable start of the year, the German economy is now starting to feel some headwinds. A drop in exports can be interpreted as a worrying sign for companies this year. Furthermore, strong Euro is making products less competitive globally. The EUR/USD pair almost 7% higher than a year ago, while the index that measures Euro's performance gained only 3.5%. Ukraine tensions, uncertainties surrounding the Chinese economy and slowing emerging markets are all posing a serious threat to Europe's powerhouse.
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