Euro zone sentiment rises for fourth month in February

Wed Feb 27, 2013 5:37am EST
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By Ethan Bilby

BRUSSELS (Reuters) - Economic and business confidence in the 17 countries using the euro improved for the fourth straight month in February, the European Commission said on Wednesday, as factories saw their order books filling up.

Economic sentiment in the euro zone rose by a better-than-expected 1.6 points to 91.1, continuing a recovery started in November last year, the Commission said.

The euro hit a session high against the dollar after the data release, before slipping back slightly to trade around 1.3093 by 1035 GMT.

Economists polled by Reuters had expected a reading of 89.8.

The euro zone was managing to eke out a small recovery, but it was too soon to be optimistic about a broader trend, Capital Economics economist Ben May said.

"Clearly the Italian election and the political uncertainty and the market uncertainty that resulted from that is potentially another trigger for a new downward leg in business and consumer sentiment, and given that this survey predates that I think you certainly wouldn't want to assume you are going to see this continued upward trend in sentiment over the months ahead," he said.

The Commission also said business morale increased by 0.36 points to -0.73, reaching a level last seen in May 2012.

The European Central Bank's unprecedented decision last year to buy the bonds of governments who ask for help calmed the euro zone crisis dramatically, removing the risk for businesses of a break-up of the currency bloc.   Continued...

The euro sculpture is pictured outside the headquarters of the European Central Bank (ECB) in Frankfurt, February 5, 2013. The ECB governing council will meet on February 7 and decide whether interest rates will be changed or not. REUTERS/Kai Pfaffenbach