German investor confidence resumed its rise for a second month in Jan. as the measures taken by European officials managed to restore confidence in the regions biggest economy.
Confidence continued its rebound after it rose in December to seven-month high on expectations Germany will gather momentum in 2013.
ZEW survey economic sentiment leaped to 31.5 this month from a prior of 6.9 and expectations of 12.0, while the current situation gauge surged to 7.1 from 5.7 December.
Meanwhile, there are some confidence that the three-year-old debt crisis could be abating after the recent decisions reached by European finance ministers to resolve the Greek debt dilemma.
Yesterday, euro area finance ministers approved the payout of 9.2 billion euros to Greece this month, while at the end of last year they agreed to make the ECB as chief supervisor of euro zone banks which is deemed a step of a paramount importance as it paves the way for a strong European banking union.
Later in the day, EU finance ministers will convene in Brussels to approve a new transaction tax in 11 members, where talks about EU banking union and ECB supervision are predicted to take part of the discussions.
On the macroeconomic level, the latest growth data from Germany has casted doubts about the performance of the Germany economy in the fourth quarter as Germanys economy grew 0.7% in 2012, much below 2011 levels of 3%, suggesting a contraction of 0.5% in the last three months of 2012.
Exports growth slowed 4.1% in 2012 versus 7.8% a year before while imports rose 2.3% from 7.4% in 2011.
The German government cut growth forecasts for this year to 0.4% from 1% predicted in October on slowdown in other euro area destinations, while expects a pick to 1.6% in 2014.
Zew survey economic sentiment for the euro area climbed to 31.2 this month from -7.6.
However, the German Bundesbank mentioned in its monthly report released yesterday that the economy will show signs of recovery after a possible contraction in the fourth quarter.
“The largely stable labor market and a better outlook for output suggest that the economic weakness won’t last all that long,” the Bundesbank said.
Later in the week, PMI advanced reading for Jan. will show that German manufacturing eased contraction to 46.8 from 46.0 in Dec. and services steadied at 52.0.
As of 10:05 GMT, the euro inched up to 1.3327 after lowering its gains when it dipped from a high of 1.3370 before the release of the upbeat report.