FX.co ★ German business confidence dips

A closely-watched survey showed that business confidence in Germany declined in June amid growing trade war risks.

The Ifo institute that its monthly confidence index fell to 101.8 in June from 102.3 last month. That was the lowest reading since May 2017.

The gauge has been falling for six months with the latest decline coming on the back of growing trade tensions between the US and China.

Germany’s manufacturing activity continued to slow, just like the services, trade and construction sectors’ growth. That signals a slowdown in Europe’s biggest economy.

The Purchasing Managers Index calculated by IHS Markit came in stronger than expected in June, while the growth in the services sector was weighed down by slowing pace of manufacturing growth.

The country’s manufacturing activity and exports were weak during the first four months of 2018. According to analysts, the recent crisis in Chancellor Angela Merkel’s coalition over immigration policy has not affected the German economy.