Investing.com - German economic sentiment deteriorated to the lowest level since December 2012 in September, fuelling concerns over the euro zone's largest economy, industry data showed on Tuesday.
In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment fell by 1.7 points to 6.9 this month from August’s reading of 8.6. Analysts had expected the index to decline by 3.8 points to 4.8 in September.
The Current Conditions Index deteriorated to 25.4 this month from 44.3 in August, worse than expectations for a decline to 40.0.
The report said the decline in economic sentiment was likely connected the impact of ongoing geopolitical tensions on the German economy.
Recent economic reports have indicated that sanctions on Russia as a result of the conflict in Ukraine are acting as a drag on the German economy. Germany is Russia’s largest trading partner in Europe.
Meanwhile, the index of euro zone economic sentiment plunged to 14.2 in September from 23.7 in August, below expectations for a decline to 21.3.
On the index, a level above 0.0 indicates optimism, a level below 0.0 indicates pessimism.
EUR/USD was trading at 1.2942 from around 1.2946 ahead of the release of the data, while EUR/GBP was at 0.8002 from 0.8005 earlier.
Meanwhile, European stock markets remained lower. The DJ Euro Stoxx 50 inched down 0.6%, France’s CAC 40 shed 0.7%, Germany's DAX lost 0.5%, while London’s FTSE 100 slumped 0.5%.