Investing.com - German private sector output growth accelerated in February, boosting the outlook for the health of the euro zone’s largest economy, according to data released on Tuesday.
The preliminary reading of the Markit manufacturing purchasing managers’ index rose to a 69-month high of 57.0 this month from 56.4 in January.
Economists had expected the index to tick down to 56.0.
The services PMI rose to a three-month high of 54.4, compared to expectations for 53.6 and up from 53.4 a month earlier.
The composite output index, which measures the combined output of both the manufacturing and service sectors rose to a 34-month high of 56.1 from 54.8, compared to expectations for 54.7.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
“The flash PMI results for February signaled the strongest growth of the German economy for just under three years, with manufacturing in particular expanding at a marked pace and services recovering the momentum lost at the start of the year", Trevor Balchin, senior economist at survey compiler Markit said.
"The latest PMI adds to our expectations that economic growth will strengthen in the first quarter to around 0.6% q-o-q, marking a strong start to 2017. IHS Markit currently expects German GDP to rise 1.9% in calendar-adjusted terms this year, which would be the strongest growth since 2011."
EUR/USD was at 1.0563 from around 1.0570 ahead of the release of the data, while EUR/GBP was at 0.8502 from 0.8511 earlier.