Ausforex German economic data is embarrassing, the euro against the dollar may continue to be under pressure

SEPTEMBER 13 - The euro came under pressure after some "ugly" economic data from Germany, and economists warned that things were unlikely to improve soon. Germany's ZEW survey reported that its current assessment fell sharply to its lowest level since August 2020. After the data was released, the euro fell to 1.0712 against the dollar, and the decline was also attributed to the dollar's rebound.

The euro came under pressure after some ugly economic data from GermanyEconomists have warned that...The situation is unlikely to improve anytime soon. Germany's ZEW survey reported that its current assessment fell sharply to its lowest level since August 2020.

The results of a survey of financial experts revealed that the current economic situation has a net sentiment rating of -79.4 points, much lower than the market expectations of -75.0 points.

Stefan Schilbe, chief economist for Germany at HSBC, said: "The ZEW figures for September are another strong reminder that not everything is going well in the German economy."Describing the data as "ugly", then warning that "things could get worse"After the data was released, the euro fell to 1.0712 against the dollar, which was also attributed to the dollar's rebound.

One bright spot was that the expected portion of the survey rose 0.9 points to -11.4, the second consecutive increase.

"While one might argue that at least expectations have improved beyond consensus expectations, the increase has been negligible," said Mr. Schilbe. "In fact, August and September growth only wiped out about half of July's decline."

He added: "More worryingly, expectations remain negative overall, highlighting that,The current extremely bleak economic conditions are expected to further deteriorateAs a result, market participants still appear skeptical that the government's 10-point plan will be enough to improve the economy. "

The euro has been under pressure in August and September as investors brace for an economic slowdown and the end of the European Central Bank's rate hike cycle.

The European Central Bank may surprise markets by raising interest rates on Thursday, since inflation is still well above target. But most economists believe it will be the last because the slowdown will become too pronounced to ignore.

Antonio Villarroya, head of G10 macro and fixed income strategy research at Santander CIB, said: "Downside risks to economic growth are increasing and are even becoming a realityIt is now spreading to the service industry. "

Villarroya expects eurozone short-term bond yields to fall following the ECB's decision, a development that will create a mechanical drag on the euro.

"The tightening cycle is coming to an end: even if the ECB chooses to raise rates again (which remains our basic scenario for now), if it happens again, the market will have much more limited room to overreact in the form of an overly high rate hike, as we saw after the rate hike in July," he explained.

EUR/USD daily chart

At 13:13 on September 13, Beijing time, the euro was trading at 1.0749/50 against the dollar.