The business climate in western Germany cooled for the fifth month on a row in October as industrial confidence hit the lowest level for about a year, data published on Tuesday showed.
The data sent the euro down towards $0.85 on the foreign exchange market.
The business climate index for western Germany, as calculated by the Ifo economics research institute, fell to 97.2 in October from 98.0 in September.
That is the lowest level since October 1999 when the index had stood at 96.0.
The Ifo index, which is measured against a basis of 100 for 1991, is based on a survey of more than 7,000 companies and is widely watched by economists because it is seen as an indicator of companies' investment plans and the repercussions those plans will have on economic growth.
And given the size and weight of the German economy, the biggest in the 11-nation euro zone, the index is also a significant indicator of the health of the economy in the entire euro-zone.
The business climate in Germany already had begun to turn frosty in June and has cooled noticeably ever since.
Economists had expecting the index to come out steady in October.
So, when the October data were released, the euro fell on the foreign exchange markets, heading towards the key level of $0.85 from $0.8516 beforehand.
Ifo also publishes separate sub-indices for companies' current business assessment and for their future expectations.
The index assessing current business fell by nearly one point to 91.3 in October from 93.2 in September.
By contrast, the expectations index rose for the first time in five months, edging up to 103.3 from 103.0.
In the former communist east, the business climate index remained unchanged at 103.8 in October.
The current assessment index slipped to 121.7 in October from 122.4 in September, but the expectations index rose to 86.8 from 86.2.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)