Euro zone Sentix index hits highest level in nearly 3 years

BERLIN Mon Feb 10, 2014 4:35am EST

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BERLIN Feb 10 (Reuters) - Euro zone sentiment unexpectedly brightened in February, hitting its highest level since April 2011 as investors became more upbeat about conditions in the single currency bloc, which is gradually recovering from recession.

Sentix research group said its index tracking morale in the euro zone rose to 13.3 in February from 11.9 in January. That beat the consensus forecast in a Reuters poll of economists for a drop to 10.7.

"The euro zone is this month's winner! Investors are perceiving a further improvement in the troubled single currency bloc in February," said Sebastian Wanke, senior analyst at Sentix.

But he added that deflation remained a danger for the euro zone in the eyes of investors, who became considerably more worried about this in February.

Euro zone inflation slowed in January to 0.7 percent from 0.8 percent the previous month, coming in well below the European Central Bank's target of just under 2 percent.

Sentix said the 971 investors it surveyed between Feb. 6 and 8 had higher expectations for the region than at any time since February 2006.

They were the most optimistic about current conditions since August 2011. A sub-index measuring this climbed to 1.8 from -0.8 in January.

"The positive reading means that a majority of investors, even if only a very slim one, now consider the economic situation in the euro zone to be good again," Wanke said.

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