Forex News – Eurozone sentiment drops to 3-year low

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The euro zone’s sentiment index fell in July to reach the lowest level in three years as the region grapples with the sovereign debt crisis.

The Sentix index dropped for the fourth straight month to -29.6, missing expectations by Reuters analysts for a slight recovery to -26.7.7.

Meanwhile German sentiment also fell to 2.2 in July from 9.1 in the previous month, as the region’s sovereign debt crisis  spills over to Europe’s largest economy.

“The euro land virus has proliferated,” Sentix said in a statement. “The weakness in euro land is spreading to the rest of the world… The loser of the month is Germany with an index drop of 6.9 points.”

The data from Germany has signalled that its immunity may now be drawing to an end.   The strength of the German economy during the euro zone’s sovereign debt crisis has so far stood in sharp contrast to recession in other euro zone members.  But recent sentiment surveys have slipped, retail sales have dropped and a purchasing managers’ survey showed the private sector shrinking in June.