German ZEW Economic Sentiment Index improves to -12.3 in August vs. -14.4 expected

• Germany’s ZEW Economic Sentiment Index improved in August, while Current Situation Index declined.
• EUR/USD stays in daily range above 1.0900 following the latest data.

The German ZEW headline number showed that the Economic Sentiment Index improved to -12.3 in August from -14.7 in July. This reading came in better than the market expectation of -14.4. Similarly, Economic Sentiment Index for the Eurozone rose to -5.5 from -12.2 in the same period.

On a negative note, the Current Situation Index for Germany declined to -71.3 from -59.5, missing analysts' estimate of -63.

Key takeaways

"Indicator of economic sentiment remains in negative territory, though it shows a slight improvement compared to the previous month."

"Financial market experts thus anticipate a slight uptick in the economic situation by yearend."

"However, these heightened expectations need to be viewed in the context of a significantly worsened assessment of the current economic situation in Germany."

"Respondents, by and large, do not anticipate any further interest rate hikes in the eurozone and the United States and the economic outlook for the USA has seen a significant increase – these factors contribute to the improved expectations for Germany."

Market reaction

EUR/USD showed no immediate reaction to mixed sentiment reading and the pair was last seen rising 0.2% on the day at 1.0925.