German analyst and investor sentiment rose by less than expected in September, a leading survey showed today, scaling back hopes for a strong recovery in Europe's biggest economy.
The Mannheim-based ZEW economic think tank said its expectations index for Germany rose to 57.7 from 56.1 in August, reaching its highest since April 2006, although economists had expected a bigger rise.
The euro hit a session low versus the dollar after the release of the data, which was below the mid-range forecast of 60.0 in a Reuters poll of economists last week. "Current conditions are perceived as very weak, or that is to say weaker than we had expected in view of improving orders and more movement in global trade," said Stefan Schilbe from HSBC Trinkaus.
"It is clear that the emerging recovery will not be in a 'V' form but will be a rocky path," he added.
The ZEW reading follows a run of recent economic indicators that have suggested a nascent recovery in Germany is gathering speed in the third quarter.
German exports increased for a third straight month in July, when manufacturing orders rose by more than expected, data released last week showed. Business sentiment also rose strongly in August to its highest level in nearly a year.
However, the VDMA engineering industry association struck a more cautious note earlier this month, forecasting output in the sector would stagnate next year.
"Recovery takes time, and is very susceptible to disruptions and setbacks," VDMA President Manfred Wittenstein said.
The ZEW index was based on a survey of 293 analysts and investors polled from August 31st to September 14th, the think tank said.
A separate ZEW index on current conditions rose to -74.0 from -77.2 in August, putting it at its highest level since December 2008. Economists had forecast a rise to -68.0.
Reuters