Business confidence in Germany increased more than expected this month to touch a seven-month high, raising optimism about the health of the eurozone's largest economy amid ongoing worries about the credit crisis.
The Munich-based Ifo institute said that its business climate index rose to 109.6 from 108.3 in January. That is the fourth straight gain and the highest reading since July. Economists had predicted an increase to 108.8.
The monthly index is based on a survey of around 7,000 German firms in the manufacturing, construction, wholesale and retail sectors.
The euro extended a gain versus the dollar following the data and traded 0.6% higher at US$1.3316.
The German economy contracted less than forecast in the fourth quarter of 2011 and factory orders beat estimates in December, adding to signs that the country might avoid slipping back into a recession.
Ifo’s gauge of the current situation increased to 117.5 from 116.3, while an index measuring executives’ expectations advanced to 102.3 from 100.9.
Separately, Italy's consumer confidence rose more than forecast, a report showed today.
The Italian index of consumer confidence rose to 94.2 in February from a revised 91.8 in January, which was a 16-year low, national statistics office Istat said in Rome. Economists forecast a reading of 92.1.