VW Scandal and Growth Doubts Impacted German Confidence

Morale among German analysts and investors plummeted in October as the diesel emissions scandal at carmaker Volkswagen and weakness in emerging markets took their toll, a survey by ZEW think tank showed on Tuesday.

Mannheim-based ZEW said its monthly survey showed economic sentiment falling to 1.9 points in October from 12.1 in September. That was far below the consensus forecast for a reading of 6.0.

“The emissions scandal at Volkswagen and sluggish growth in emerging markets are dampening the economic outlook for Germany,” ZEW said in a statement.

A separate gauge tracking current conditions dropped to 55.2 points from 67.5 points in September, undershooting expectations for a drop to 64.7.


Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza