A leading German confidence index has shown a pick-up this month as the euro eased against the dollar and financial analysts and institutional investors hoped for a change in government to pull the economy out of its current doldrums.
The ZEW economic research institute's economic expectations index, based on a poll of 315 analysts and institutional investors, rose by 5.6 points to plus 19.5 in June. The increase was slightly sharper than expected.
'The reason the sharp rise in economic expectations is, in addition to the sharp fall in the euro exchange rate, the hope that following the autumn elections that necessary reforms will be implemented more energetically,' said ZEW president Wolfgang Franz.
The ZEW indicator represents the balance between positive and negative expectations for the economy over the next six months. If most analysts and institutional investors polled believe the economy will improve, the index shows a plus. If most are expecting a deterioration, the index shows a minus.
