For a second consecutive month the ZEW German Economic Sentiment survey demonstrated an improvement in the levels of investor confidence.
Many German policy makers will be glad of this positive result. Whilst Germany remains the biggest economy in the Eurozone it has shown some worry signs of slowing growth in recent months.
In the first quarter of this year German economic growth stood at 0.5 per cent. By the second quarter the knock on effect of recessions and budget cuts in other members of the 17-nation currency bloc pushed German growth down to 0.3 per cent. Other recent negative news for the nation includes business confidence plummeting to a 2 ½ year low in September and Factory orders dropping by more-than-predicted in August.
But now the Mannheim based ZEW Centre for European Research has implied that the European Central Bank’s proposal to buy government bonds has reassured financiers that the Eurozone sovereign debt crisis can be resolved.
This view was supported by the German ZEW index of investor and analyst expectations, which clawed its way from September’s low of -18.2 to -11.5. Economists involved in a Bloomberg News Survey predicted that the figure would only rise to -14.9.
The ZEW data aims to forecast economic developments six months in advance and this improvement in investor confidence could mean further positive movement on the horizon.
The Euro enjoyed gains following the data release but any advances were short-lived with the common currency little changed from its former level as trade continued.
As of 11.50 am:
The Pound to Euro exchange rate is currently trading at 1.2362
The Pound to US Dollar exchange rate is currently trading at 1.6087
The Pound to Australian Dollar exchange rate is currently trading at 1.5652
The Euro to US Dollar exchange rate is currently trading at 1.3015
The Euro to Pound exchange rate is currently trading at 0.8087
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