Forex News – Euro zone sentiment on the rise

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Euro zone sentiment indicators released today showed that businesses and consumers in the euro region are more upbeat about business prospects based on a survey in February.

The economic sentiment index rose to 94.4 from 93.4 in January, the second straight monthly increase and a stronger outcome than the 94.0 that was forecast.

Despite recent GDP data showing a the euro zone contracted in the final quarter of last year, and a weak jobs outlook, confidence for recovery appears to be picking up.

Manufacturers sentiment rose to -5.8 from – 7.0, driven by a pickup in domestic orders, while export orders weakened.

Meanwhile confidence amongst retailers, construction companies and financial services firms also became more upbeat. Only service providers seemed more gloomier about their prospects.

The European Commission expects the euro area’s economic output to contract 0.3 percent in 2012, but the EU’s top economic official Olli Rehn sees a recovery in the second half of the year.

However, the euro zone economy remains fragile and unemployment one is at record highs at about 10 percent of the working population and is expected to rise this year as the region heads into recession.