2020.03.1714:55:00UTC+00Euro Weakens As German Economic Confidence Slumps Most Since 1991

The euro fell sharply against its major counterparts in the European session on Tuesday, after German economic confidence plunged to its lowest level since December 2011 amid fears about the economic fallout from the coronavirus outbreak. Survey results from the ZEW - Leibniz Centre for European Economic Research showed that the economic sentiment index plunged 58.2 points to -49.5 in March

This was the biggest fall since the survey began in 1991 and reached its lowest level since December 2011. The score was also worse than the economists' forecast of -27.2.

At the same time, the index measuring current economic situation declined 27.4 points to -43.1 in March. The expected reading was -30.0.

Sentiment deteriorated as coronavirus worries offset expectations of more stimulus.

The deadly coronavirus has so far infected 181,580 people worldwide and killed more than 7,100, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University.

The euro declined to near a 3-week low of 1.0973 against the greenback from yesterday's closing value of 1.1180. The euro is seen finding support around the 1.08 mark.

The euro weakened to 117.35 against the yen and 1.0545 against the franc, from its early high of 119.69 and a 4-day high of 1.0605, respectively. Next key support for the euro is likely seen around 116.00 against the yen and 1.04 against the franc.

The single currency pared gains to 1.8331 against the kiwi and 1.5486 against the loonie, from its early highs of 1.8560 and 1.5672, respectively. The euro is poised to challenge support around 1.78 against the kiwi and 1.52 against the loonie.

The euro marginally dropped to 1.8231 against the aussie, after rising to 1.8404 at 2:45 am ET, which was its strongest level since April 2009. Immediate support for the euro is possibly seen around the 1.61 level.

The euro was trading at 0.9077 against the pound, down from a high of 0.9134 seen at 2:45 am ET. Should the euro slides further, 0.88 is likely seen as its next support level.

Data from the Office for National Statistics showed that the UK unemployment rate increased at the start of the year.

The jobless rate gained 0.2 percentage points from the preceding quarter to 3.9 percent. This was above the forecast of 3.8 percent.