Confidence among German businesses has increased for a third consecutive month and risen more than economists had been expecting. The news adds to the encouraging signs that Europe’s biggest economy is on track to make a good recovery following its slump at the end of last year.
The IFO institutes business climate index which is based on the opinions of 7,000 business executives, showed an increase from 102.4 in December to 104.2 in January, the highest level since June 2012 and the third straight increase. Economists had been predicting an increase to 103.
The German economy showed worrying signs at the end of 2012 as growth slowed to just 0.7%, down from the 3% recorded in 2011. The nations GDP is expected to have shown a fall by as much as 0.5% in the fourth quarter of last year.
As a result of the positive news the Euro has made gains against all of its most traded peers, rising by as much as 0.5% against the US Dollar and 0.6% against the weakened British Pound.
Despite all of the positivity flying about, the Eurozone remains in a dangerous position. Business confidence in Belgium fell unexpectedly in January; unemployment hit a new record high in Spain and Greece remains mired in recession.
Andreas Moeller,an analyst at WGZ Bank warns; ““It is true that the risk of a euro-area break up has been contained and that we may see a recovery at some point, “But this may take a long time. For now, Europe’s economy is still in crisis mode.”
These exchange rates were correct as of 10:00 am
The Pound to Euro exchange rate is currently trading at 1.1738
The Pound to US Dollar exchange rate is currently trading at 1.5773
The Pound to Australian Dollar exchange rate is currently trading at 1.5084
The Euro to US Dollar exchange rate is currently trading at 1.3434
The Euro to Pound exchange rate is currently trading at 0.8515
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