German investor confidence soared to 7-month high

Morning Forex Fundamental: EUR

'Germany faces a very favorable environment, largely on the back of expansionary monetary policy' - Ralph Solveen, head of economic research at Commerzbank AG

German investor confidence soared to 7-month high

Impact High

Confidence among German investors soared to the 7-month high in December on speculations that the Europe’s largest economy will gain momentum in the next year. According to the ZEW Center for European Economic Research, its index, which measures investor and analyst expectations, unexpectedly rocketed to 6.9 this month, up from minus 15.7 in November. At the same time the gauge of current economic situation in the country improved to 5.7 compared to previous month’s reading of 5.4. The improvement in data was not projected by the analysts, as in the previous week the Bundesbank lowered its growth forecast, saying German economy will contract in the fourth quarter of 2012 and stagnate in the first three months of next year.

'Germany faces a very favorable environment, largely on the back of expansionary monetary policy,' said Ralph Solveen, head of economic research at Commerzbank AG in Frankfurt. 'Should the sovereign debt crisis continue to ease in the next few months as we expect, this implies a significant revival of the economy in the course of 2013.'

'Although the economy will continue to cool into 2013, as things currently stand Germany will not have to face a recession,' ZEW President Wolfgang Franz said in a statement.