The Euro was little moved against the Pound despite the release of data which showed that economic sentiment in Germany and the wider Eurozone tumbled sharply in May.
In its report the ZEW Centre for Economic Research said that its index for German economic sentiment tumbled by 10.1 points to 33.1 in May.
The fall was well below the previous month’s figure of 43.2 and marks the fifth consecutive month that sentiment in the Eurozone’s largest economy has declined.
Economists had been expecting a decline of just 2.2 points to 41.0.
“The German economy is experiencing some headwind from the Euro, but there is no need to dramatize. Given the good state of the global economy and the very expansionary monetary policy of the ECB, Euro appreciation should hardly be enough to stop the upswing,” said an economist from Commerzbank.
A separate ZEW report for the wider Eurozone also showed a decline.
The Euro to GBP exchange rate is trading in the region of 0.8169.
Eurozone economic sentiment tumbled from the 61.2 figure recorded in April to 55.2 in May and was well below economist expectations for a rise to 63.5.
According to the ZEW index a figure above 0 indicates optimism whereas a number below 0 indicates pessimism.
The data is likely to have fallen as a result of the concerns over the ongoing crisis in Ukraine and investor caution that the region’s painfully slow economic recovery leaves the region vulnerable to shocks.
“For a few months there has been negative news like problems in the emerging markets or the strong Euro.ZEW expectations can hint at turning points in the GDP growth rate, so we should expect lower growth in the coming quarters,” said an economist from Dekabank.
The Euro also remains pressure from expectations that the European Central Bank will introduce new monetary easing measures in June.
After the data was released the Euro weakened slightly against the US Dollar.
Euro Exchange Rate News:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3762 ,
Euro,,British Pound,0.8169 ,
Euro,,Australian Dollar,1.4730 ,
Euro,,Canadian Dollar,1.5026 ,