Investor sentiment in Germany fell for the ninth straight month in October to reach its lowest level in over 13 years, according to the economic thinktank ZEWinstitute.
It said its economic expectations indicator for Germany, based on a survey of 298 analysts and institutional investors, fell to -27.4 from -22.2 in September.
That was lower than the -20 reading expected by economists and the weakest level since March 1993.
The drop in sentiment comes amid concerns about a looming tax hike and a cooling US economy.
The euro slipped briefly against the US dollar in response to the figures. ZEW President Wolfgang Franz said rising orders and lower oil prices should have helped the indicator in October.
"Economic expectations were, however, overshadowed by a possible cooling of the US economy, by a likely further rise in ECB interest rates, and above all by the decreased consumer buying power through the VAT increase and other tax measures in 2007," he said.