Economic confidence in the euro area rose more than economists forecast in January, adding to signs that the 17-nation currency bloc may be emerging from a recession.
An index of executive and consumer sentiment rose to 89.2 from a revised 87.8 in December, the European Commission in Brussels said today. That’s the highest since June. Economists had forecast an increase to 88.2, according to the median of 30 estimates in a Bloomberg News survey.
The euro strengthened above $1.35 for the first time since 2011 before today’s report and traded at $1.3556 at 12:14 p.m. in Brussels, up 0.5 percent on the day. European Central Bank President Mario Draghi said last week economic activity is “stabilizing at a very low level” and Germany’s Bundesbank expects Europe’s largest economy to rebound in the first quarter from a contraction at the end of 2012.
“The series of positive surprises on euro-zone survey releases in January support our growth scenario,” Evelyn Herrmann, European economist at BNP Paribas SA in London, wrote in an e-mailed note. While leading indicators “are still at levels in line with contraction,” she wrote, “their upward trend supports our forecast of a slowdown in the pace of contraction” from 0.4 percent in the fourth quarter to 0.1 percent in the first three months of this year.