Euro-zone contracts as expected, German sentiment disappoints

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The flash estimate for the euro-zone’s GDP printed a drop of 0.2% in economic output, as expected. Expectations rose a bit after both Germany and France posted better than expected results.

However, Germany’s ZEW economic sentiment fell to -25.5 points. Estimates were for a very minor change from last month’s -19.4 points.

The all-European ZEW figure improved from -22.3 to -21.2 points, but this was worse than a predicted improvement to -19.1 points. Note that the negative numbers represent pessimism.

In addition, industrial output dropped by 0.6%, a little worse than a drop of 0.5% that was predicted.

EUR/USD is sliding to 1.2360, after already enjoying higher ground. The strong German growth and the fact that France avoided contraction helped the common currency. Also the news that no delay is expected in the German constitutional court’s ruling about the ESM helped the pair.

For more on the euro, see the EUR/USD prediction.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.