German business confidence falls

German business confidence fell for a fourth straight month in August as the sovereign debt crisis curbed growth in Europe’s largest economy.

The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 102.3 from 103.2 in July. That’s the lowest reading since March 2010.

German economic growth slowed to 0.3 per cent in the second quarter from 0.5 per cent in the first as the debt crisis damped demand for exports and prompted companies to postpone investments.

While sales to faster-growing markets outside Europe and domestic spending are helping to insulate Germany from the turmoil, the Bundesbank said last week that the prevailing uncertainty may cause the economy to cool further.

“Recent economic data are not encouraging,” said Jens- Oliver Niklasch, an economist at Landesbank Baden-Wuerttemberg in Stuttgart.

“The construction industry as well as the export industry will see a slowdown in the months to come.”

Ifo’s gauge of the current situation eased to 111.2 from 111.5 in July, while a measure of executives’ expectations fell to 94.2, the lowest since June 2009, from 95.5.

The euro rose after the report to trade at $1.2523 at 11 am in Frankfurt, up 0.1 per cent today.

The Irish Times

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell