German business confidence unexpectedly rose in July, a survey showed on Tuesday, hitting the third record high in as many months as Europe's largest economy powered ahead and morale lifted across industry. David Pollard reports.
BROADCAST AND DIGITAL RESTRICTIONS**Broadcasters: NONE Digital: NONE**~ Business morale at a new high - and firms 'euphoric', according to Germany's influential IFO institute. Its key business climate index hitting 116 in July - the third record in three months, and above forecasts. Brexit, Trump, Turkey - even a stronger euro - none of them currently dragging on sentiment. (SOUNDBITE) (German) IFO INSTITUTE ECONOMIST, KLAUS WOHLRABE, SAYING: "We expect the second quarter to grow strongly ... We see a growth rate well above what we had last year." And the data does appear to settle any doubts raised by Monday's PMI numbers. They showed an unexpected slowdown in German private sector activity. In part, thanks to summer closures. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "We're seeing very strong and robust growth from Germany and I think both figures suggest that's going to continue." But even if it's not a worry yet, the dollar's slide to a 13-month low will put even more upward pressure on the single European currency. Especially as markets begin to bet on some form of policy tightening from the ECB. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "I think the ECB are concerned about the levels which were seeing the euro at ... I think they are going to produce some form of headwinds. But if we can see the kind of momentum maintained in other areas of the economy, then I don't think it's going to present too much of a problem. If it does, I don't think the ECB will hesitate to reverse course." If for now the outlook looks upbeat. In a week when the IMF has upgraded its forecast by 0.2 per cent. Growth for the euro zone now seen at a healthy 1.9 per cent for 2017.