Sentiment in the euro zone weakened further in June as the Greek debt crisis and a slightly firmer single currency prompted investors to pare back their expectations for the economy.

Sentix research group’s index tracking morale among investors and analysts in the euro zone slipped to 17.1 in June from 19.6 in May.

“It’s hardly astonishing that the economic barometer has clouded given that Greece’s future is still unresolved, the single currency has strengthened again and long-term interest rates have also increased recently,” said Sebastian Wanke, senior analyst at Sentix.

Greece and its international lenders are still struggling to make headway on talks to unlock remaining bailout aid. On Sunday, European Commission president Jean-Claude Juncker warned that time was running out to conclude a debt deal to avert a damaging Greek default.

Sub-indices showed that both investors’ expectations and their assessment of current conditions fell. Nonetheless, Wanke noted the overall index still remained at a significantly higher level than at the start of the year, signalling a “solid upturn” for the euro zone.

An index tracking Germany showed sentiment in Europe’s largest economy declined for a third consecutive month, with the expectations component sinking to its lowest level since November last year.

Sentix said investors had normalised their expectations, pointing to the firmer euro, waning momentum in the global economy and higher long-term interest rates.

The survey of 926 investors was conducted between June 4 and June 6.

Reuters