The Euro has edged higher against Sterling and has climbed against the US Dollar and a number of its most traded peers after German investor confidence increased more than expected in August as the Eurozone’s largest economy pulled the region out of recession.
According to the ZEW Centre for European Economic Research in Mannheim the index of invests and analyst expectations rose to 42 in August, up from the 36.3 in July. Economists had been predicting the figure to rise to 39.9. The data combines with a recent pickup in China and the USA has boosted confidence that the global economy is making a recovery.
“Better-than-expected data from China and the USA are reflected in investor confidence. The fundamentals of the German economy are healthy and that should help other European countries to grow. But there’s still a risk that the debt crisis will flare up again,” said Aline Schuling, senior economist at ABN Amro Bank.
Investor confidence for the wider Eurozone also saw a rise with sentiment rising to 44 from the 32.8 recorded in the previous month.
First signs of an end to the recession in important Euro-zone countries may have contributed to the indicator’s rise,” ZEW said in a statement.
“This is also reflected by the strong increase of economic expectations for the Euro zone. Furthermore, the economic optimism is supported by the robust domestic demand in Germany.”
The German economy is expected to see further improvement on Wednesday when the latest GDP data for the country is released. Economists are expecting the economy to have expanded by 0.6% in the second quarter.
Current Euro (EUR) Exchange Rates
As of 11:00 am
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3288
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8596
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4557
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6625
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3722