Forex News: Euro Slides On Downbeat German Economic Sentiment Data

Euro Slides On Downbeat German Economic Sentiment Data

(RTTNews) - The euro weakened against other major currencies in the European session on Tuesday, after German economic confidence deteriorated sharply in August due to disappointing EU-US trade deal.

Data from a monthly survey conducted by the think tank ZEW showed that the German ZEW Indicator of Economic Sentiment fell to a three-month low of 34.7 in August from 52.7 in the previous month.

Similarly, the Current Economic Situation index fell from -59.5 in July to -68.6, which is higher than the -65.0 figure that market analysts had predicted. Investors who continue to focus on the US inflation data that is expected later today and the remarks made about the Trump-Putin meeting on Ukraine's war have not been reassured by the pessimistic ZEW Economic Sentiment Index.

According to some media reports, Russian President Vladimir Putin offered a ceasefire plan in exchange for Eastern Ukraine territory concessions. Ukrainian President Volodymyr Zelenskyy has categorically denied the prospect, but investors are still holding out hope for a peace agreement because Putin will meet US President Donald Trump in Alaska on Friday.

The US Consumer Price Index (CPI) data for July, which is anticipated to be closely examined for more hints regarding the Federal Reserve's (Fed) upcoming monetary policy actions, will be the main event later in the day. Expectations that the Fed would lower interest rates in September have increased in light of recent labor data and the most recent remarks made by Fed policymakers.

In the European trading today, the euro fell to nearly a 2-week low of 0.8621 against the pound, from an early high of 0.8655. The euro may test support near the 0.85 region.

Against the U.S. dollar, the euro slid to 1.1601 from an early high of 1.1629. The euro is likely to find support near 1.14 region.

The euro edged down to 172.19 against the yen, from an early high of 172.45. The EUR/JPY pair had traded more than 2-week high of 172.52 in the Asian trading session. On the downside, 171.00 is seen as the next support level for the euro.

Against the Swiss franc, the euro slipped to 0.9401 from an early high of 0.9435. The next possible downside target for the euro is seen around the 0.92 region.

Looking ahead, U.S. NFIB business optimism index for July, Canada building permits for June, U.S. CPI data for July, U.S. WASDE report, U.S. Redbook report and U.S. monthly budget statement for July are slated for release in the New York session.

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