German investor confidence rose less than median expectations in May ahead of a key EU finance ministers meeting later on Tuesday that will include talks about the formation of European banking union.
Zew survey economic sentiment rose to 36.4 from 36.3 in April, coming below forecast of 40, while the current situation gauge fell to 8.9 from 9.2, lower than forecasts of 9.2.
The most recent data has pointed to a possible pickup in growth, where Germany is predicted to record 0.3% expansion in the first quarter from 0.6% drop in the last three months of 2012, according to GDP data due tomorrow.
The Bundesbank said in April that the cold weather may have caused a delay in recovery, yet it predicts 0.4% advance this year.
The Zew survey (economic sentiment) for the euro area rose to 27.6 in May from 24.9.
A separate report from the euro area slow showed 1.0% advance from both revised and excepted readings of 0.3%.
This month, the ECB decided to cut interest rate to a record low of 0.50% while left the door opened for further cuts and possible slash of deposit rate to negative areas.
Euro area finance ministers agreed yesterday to provide Greece 7.5 billion-euro installment of its bailout while Cyprus received 2 billion euros on Monday and 1 billion euros in June as a part of its 10 billion-euro aid package.
Later in the day, EU finance ministers will discuss possibilities of forming a banking union by next year.
While German Finance Minister Wolfgang Schaeuble has warned that establishing a banking union would require a change in EU treaties and suggested national co-operation first, European Central Bank policymaker Joerg Asmussen showed his support to calls from France and the European Commission for the formation of a single supervisory authority and a mechanism for euro area lenders next year.
As of 09:30 GMT, the euro surged to 1.3020 versus the dollar after hitting a high of 1.3027, where the breach of 1.2990 then 1.3000 levels, which represent daily SMA 200 and daily SMA 50 pushed the pair higher.
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