The euro extended losses after the German Ifo index printed weaker-than-expected numbers, further adding to bearish sentiment on the euro zone. German business sentiment dropped for the first time in seven months in May.
EURUSD plunged to a fresh 22-month low of 1.2514 at 08:03 GMT from around 1.2540 before the data. Against the yen, the euro was down 0.5 percent at 99.34 yen, trading at its lowest since February 1, when it fell to 99.23 yen
The German business survey ,based on a monthly survey of some 7,000 companies, showed a drop in the index to 106.9 in May from 109.9 in April. The consensus forecast had been for a drop to 109.4.
Meanwhile, thirty minutes before the German Ifo, German flash PMI data were released on manufacturing and service sectors. The weak manufacturing sector is likely to be enough to bring down German GDP numbers during Q2 into negative territory. Germany is Europe’s largest economy and is seen as a powerhouse, so its economy is closely watched. Any disappointing economic data has a negative effect on the euro.