The U.S. dollar has risen to an eleven-month high as market predictions for the United States economy become more optimistic, while German data continues to boost European shares.
The economic upturn has also lowered government bonds, while raising oil prices. ZEW, the German think tank, has revealed that investors have a much more positive outlook for the region’s economy. It also implies that Germany’s economy, currently the largest in Europe, will withstand the recession that continues to threaten other Eurozone nations.
“We think Germany should remain the best in class for this year in terms of growth, but we still see a sizeable deceleration from last year,” said Standard Chartered Bank’s Thomas Costerg.
European stocks have climbed more than 21% since late last November, a period in which economies struggled as a result of the insistent Eurozone debt crisis. U.S. retail sales and growth have also risen since the fourth quarter of last year, and are expected to continue to increase, as optimism on global growth and recovery spreads.
The status of these two economies will certainly improve investor outlook and strengthen the belief in a supportable recovery.
Joshua Raymond of City Index said “Liquidity has helped to improve sentiment in the near term, but I think there are a number of longer term concerns in the market place, and that is all to do with growth.”
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