German economic confidence data released on Tuesday show signs that an economic turn-around in Germany is getting stronger.
The ZEW index gave a reading for the first time in positive territory since May , rising to 6.9 points from 15.7 in November, coming in well above expectations for a reading of -12.0. A reading above 0.0 indicates optimism and below indicates pessimism.
The ZEW think tank said the survey was carried out between November 26 and December 10, and included a survey of 285 respondents who gave their ratings on the economic outlook for Germany in the next six months.
The ZEW is forward looking and is a long term view, based on investors view. They are confident Germany will avoid a recession. Their views contradict the latest data from the Bundesbank and the ECB which have been more pessimistic and cut growth forecasts for 2013 last week.
German businesses and investors are confident Germany can decouple from the rest of Europe, especially because most German companies have major business outside Germany, particularly the in US and China. There are appears to be good momentum in US and China so that is helping Germany.
Euro rose after the ZEW data, rising by 0.1 percent against the dollar immediately after the news.