The euro declined after a measure of German business confidence plunged more than analysts had expected. The euro dropped 0.3 percent versus the dollar as of 7:02 a.m. New York time.
German investor confidence, which is compiled by the ZEW Center, fell for the eighth straight month owing to weak euro zone recovery and geopolitical crisis in Ukraine. A Russian humanitarian mission moved towards eastern Ukraine despite a warning by US to President Vladimir Putin not to hide under the guise of aid to send in Russian soldiers.
“The poor ZEW data is bad news for the euro,” Peter Rosenstreich, a Gland, Switzerland-based chief foreign-exchange analyst at Swissquote Bank SA, told Bloomberg News. “We know about the economic weakness in peripheral countries like Italy, but there’s always hope that Germany will be a growth engine that supports the region. Now the growth engine itself seems to be sputtering.”
The ZEW gauge of economist and investor confidence, which forecasts the state of economy in the next six months, fell to 8.6 in August, compared to 27.1 in July. Economists surveyed by Bloomberg News had expected the index to decline to 17. The measure has plunged each month after touching the highest level in seven years in December.
The US dollar advanced against most of its peers, rising 0.3 percent to $1.3340 per euro. It also gained 0.1 percent to trade at 102.33 yen. The New Zealand dollar touched its lowest level since June 4, skidding by up to 0.6 percent to US 84.09 cents as a report indicated the annual home prices grew by the weakest pace since September 2012. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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