By TraderVox.com
Tradervox (Dublin) – A ZEW report on investor confidence in German showed that it rose to 21 month high, surpassing projections by many analysts of 12. The index rose to 22.3 from 5.4 in February hitting a six month high. The report came after the ECB gave financial institutions three year loans to alleviate the looming the credit crunch. This is the fourth month that this index has risen with the current reading being the highest since June 2011.
The report has eased fears of Germany ceding to economic pressure from its neighbors such as Italy and Spain which are languishing in debts. The country has emerged little scratched from the Greece debt crisis after reporting and economic growth of 3 percent in 2011. The country is expected to post a growth rate of 0.6 percent this year while Greece is expected to contract by 4.4%, Spain by 1 percent, and the whole eurozone is expected to contract by 0.3 percent.
During the release of the report, the ZEW institute indicated that the current Greece crisis seems to have “taken a pause for breath.” And also added that Germany has recorded good economic results due to the “good employment situation” and the good domestic demand it has experienced. The report also showed that concerns about the current economic situation in Euro region have reduced from 40.3 to 37.6. This is contrary to what many analysts and investors were expecting; they had projected an increase in this measure to 41.5.
After this announcement, the euro fell against the dollar to 1.3117 from 1.3145. This shows that the market is not yet ready for the big risks, even though it had showed some risk appetite for risk assets. The Greece crisis seems to cloud any positive news from the euro region as investors keep a close eye on development in countries that are on the verge of debt crisis such as Italy, Spain, and Portugal. Analysts have dropped fears of Germany getting into recession following the report by the region is not yet out of the thicket.
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