By William L. Watts, MarketWatch
LONDON (MarketWatch) -- A widely followed indicator tracking the sentiment of Germans dropped for a sixth consecutive month in March but came in above forecasts, underlining expectations that Europe's largest economy will continue to recover at a sluggish pace.
The Mannheim-based Center for European Economic Research, known as ZEW, said Tuesday its economic sentiment indicator fell to 44.5 from 45.1 in January. Economists had forecast a drop to 43.0.
Euro Heading For $1.40
A saucer pattern on the chart suggests that the euro will soon hit the $1.40 level, says Francis Bray, Dow Jones chief technical analyst for Europe.
The March reading was based on a survey of 289 German analysts. The sentiment index gauges expectations for economic performance over the next six months.
"German business activity has moved from the intensive-care unit to the rehab. But it is still far from full recovery," said ZEW President Wolfgang Franz.
The ZEW noted the index remains above its long-term average of 27.2.
The ZEW's index measuring sentiment toward the current economic situation improved to negative 51.9 points from a negative 54.8 in February.
In foreign-exchange trading, the euro briefly pushed above the $1.37 level in the wake of the dat and recently changed hands at $1.3686, a gain of 0.1% on the day. The euro also rose against the Japanese currency, up 0.3% to 123.98 yen.
Separately, the European Union statistics agency Eurostat confirmed its earlier estimate that consumer inflation in the 16-nation euro zone slowed to an annual pace of 0.9% in February from a 1% reading in January. This rate remains well below the European Central Bank's target of just below 2%.
William L. Watts is a reporter for MarketWatch in London.
More Economic Report
| July 30, 2010 | U.S. GDP slows in second quarter to 2.4% rate | |
| July 30, 2010 | Euro-zone jobless rate steady, inflation picks up | |
| July 29, 2010 | Japan's June data paints mixed picture | |
| July 29, 2010 | Weekly jobless claims fall 11,000 to 457,000 | |
| July 29, 2010 | Germany fuels euro-zone economic sentiment rise |
Todd Harrison
Minyan Market Musings