Mubasher: German business sentiment extended its deterioration for the third month in a row in June, underpinning expectations that Europe’s largest economy is shrinking in the second quarter of this year.

The German business climate index dropped to 97.4 points in June, from the revised 97.9 in May, according to survey data released by the Ifo economic institute on Monday.

“The German economy is heading for the doldrums,” the Munich-headquartered institute’s president Clemens Fuest said, noting that the business conditions among manufacturers and services providers took a turn downwards.

This month, the Bundesbank expected the German economy to shrink slightly in the second quarter, after expanding by 0.4% in the three-month period ended last March.

Following nine straight years of growth, Germany is struggling as its export-reliant manufacturers are facing headwinds from trade conflicts, Brexit uncertainty and a slowing economic expansion.

By 9:26 am GMT, the EUR/USD pair rose by 0.21% to $1.1393.