(MENAFN– ecpulse) Confidence among German investors beefed up to more than what markets had expected in July amid signs of progress from the euro area’s biggest economy.
The ZEW survey economic sentiment rose to 36.3 in July from 38.5 in June, coming below forecast of 40.0, and the current situation gauge soared to 10.6 from 8.6, higher than forecast of 9.0.
The most recent data has pointed to a possible pickup in growth, where Germany recorded an expansion of 0.1% in the first three months of this year following a drop of 0.7% in the last three months of 2012.
In its monthly report for June, the Bundesbank expected German recovery to lose momentum after showing progress in the second quarter as the bank expects a slowdown in the summer.
The Bundesbank slashed its growth forecast last month to 0.3% from 0.4% estimated in December, while estimated a growth of 1.5% for next year instead of prior forecast of 1.9%.
Germany will expand 0.3% this year, lower that April’s projection of 0.6%, as the country needs to find methods to spur investment, the IMF said last week.
The ZEW survey (economic sentiment) for the euro area rose to 32.8 in June from 30.6.
This month, the European Central Bank decided to hold interest rate to a record low of 0.50% while the ECB in its first forward guidance had referred that the rates would remain at the current historical low or even lower for an extended period.
ECB President Mario Draghi repeated that the economy will gradually recover, at subdued pace, later this year and in 2014 as sentiment indicators showed further improvement in the 17-nation region, where policy stance should support domestic demand. However, he reminded that growth risks remains to the downside.
Other reports from the euro area released today showed that trade surplus (seasonally adjusted) narrowed to 14.6 billion euros in May from a revised of 15.2 billion euros, while CPI remained unrevised at 1.6% in the year ended June.
As of 09:03 GMT, the euro pared its earlier advance against the dollar to drop from a high of 1.3097 to trade around 1.3063.
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