Business confidence in the euro-zone’s locomotive is falling: a score of 105.7 against 106.7 predicted and 107.6 last time. The expectations component dropped from 102.3 to 98.8, worse than 101.6 expected. Only the current assessment figure beat with a small rise from 112.5 to 112.9 points, above 112.1 predicted.
This is not the only disappointment from Europe’s No. 1 economy: Markit’s manufacturing PMI missed with slower growth, producer prices came out weaker than predicted and also other industrial figures are not doing so well.
The euro also suffers from a generally more positive market mood which helps commodity currencies but weighs on the safe haven euro and yen. Another small factor could be the danger of a “Brexitâ€: the higher chances of the UK leaving the EU following Boris Johnson’s backing was devastating for the pound. An exit will be painful for the UK but could also have a negative side effect for the euro-zone. However, most of the weakness could attributed to the “risk on†sentiment.
EUR/USD is ending its “dead cat bounce†and sliding back down within the 1.10 to 1.1070 range.
