Things are definitely looking up. From Bloomberg:
Investor confidence in Germany, Europe's largest economy, climbed to a 17-month high, buoyed by rising profits, growing exports and increased spending on factory machinery and equipment.
A gauge of institutional and analyst expectations for the economy rose to 50 from 37 in July, the ZEW Center for European Economic Research said today in Mannheim. Economists expected a gain to 39, the median of 40 estimates in a Bloomberg survey showed. The index has averaged 34.3 since its inception in 1991.
Apparently, it's not just favorable exchange rate movements.
Today's report "gives hope that the economic recovery, which has been supported entirely by exports, will now also be supported by domestic demand,'' said Volker Kleff, an economist at ZEW, in an interview after the index was released.
Germany's domestic economy expanded for the first time in nine months in the second quarter, growing 0.3 percent from the previous three months, the Federal Statistics Office said earlier today. Company spending on equipment and inventories led the gain.
What about the euro zone more generally?
Euro-region growth will probably accelerate to about 0.4 percent in the current quarter and 0.6 percent in the fourth from 0.3 percent in the three months through June, the European Commission, which proposes legislation for the 25-member European Union, said Aug. 11. ZEW's index for the euro region increased to an 11-month high of 41.6 in August from 29 in April.
More reason to suspect the dollar's gains for the year have hit their limit?
UPDATE: New Economist notes that the IMF does not share the optimistic views expressed in the Bloomberg article. Edward Hugh -- one of the excellent minds at A Fistful of Euros -- expresses some skepticism as well (in the comment section below). And no sooner do I ask about the likelihood of further dollar gains than we get this news from Bloomberg:
The dollar rose the most against the yen in a month and climbed versus the euro on speculation rising oil prices will harm the economies of Japan and Europe more than the U.S.
Oh well.