The Ifo Business Climate gauge for Germany surprisingly dropped to a reading of 88.6 in June from 89.3 in May.
The latest reading also came below market consensus of 89.7.
The sub-index of business expectations decreased to a level of 89 in June from 90.4 in May.
At the same time, the sub-index of current conditions remained stable at 88.3 in June.
The gauges indicated that sentiment had deteriorated at German companies, while Europe’s largest economy was facing difficulty in overcoming stagnation.
In the manufacturing sector, the business climate gauge registered a decline following three straight months of increases, data by the Ifo Institute showed on Monday.
Business sentiment also worsened in German trade.
The Euro was last 0.44% firmer on the day against the US Dollar, with the EUR/USD currency pair trading at 1.0738.
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