The ZEW Center for European Economic Research released a gloomy analysis on the German investors’ confidence that managed to reach its lowest point in 15 years. According to the Mannheim-based institute, the index of investor and analyst expectations fell to minus 37.2 in December, from minus 32.5 in November, being the lowest since January 1993.

“The financial market experts see clear risks for economic growth in important industrial countries, particularly in the U.S. This impairs the export prospects of the German economy” ZEW said in a statement. They added: "This impairs the export prospects of the German economy. The strong euro has furthermore increased uncertainty for German exporters."

According to BusinessWeek, the U.S. subprime lending crisis and ensuing market volatility has fueled worries over the health of the American economy, as well as expectations that the Federal Reserve will continue cutting interest rates. The interest rates have reached the highest peak in 6 years, which determined record levels in oil priced and a stronger-than-ever euro.

The euro reaching $1.50 could make European exports less competitive abroad and Germany is one of the countries that highly rely on its exports. The dollar’s low rates will make it less attractive for investors, and will determine them to orient towards the euro. The U.S. Central Bank is expected to further cut rates, which will contribute even more to euro’s position and will determine European exports to become uncompetitive.

“German business expectations are falling into a black hole as confidence continues to implode. Business optimism is now running at its weakest level in 15 years” said Bear Stearns’ economist David Brown according to BBC News. “The worry is that business and consumer confidence is now moving lower in tandem. This bears all the hallmarks for a hard landing next year” he added.