FRANKFURT MAIN: The US-China trade truce has sent German investor confidence soaring to its highest level in more than four years, a closely-watched survey said on Tuesday.

The ZEW institute’s monthly barometer measuring investors’ economic expectations climbed to 26.7 points in January, up 16 points on December’s reading.

January’s figure brings the index to its highest level “since July 2015”, ZEW said in a statement, far exceeding analysts’ expectations.

The optimism among investors in Europe’s top economy comes after the United States and China last week signed a partial trade deal that eased tensions after nearly two years of tit-for-tat tariffs.

“This gives rise to the hope that the trade dispute’s negative effects on the German economy will be less pronounced than previously thought,” ZEW chief Achim Wambach said in a statement.

Germany’s export-oriented economy has been hit hard by the knock-on effects from President Donald Trump’s trade war with China, with the crucial auto industry especially feeling the pain.

The German economy grew just 0.6 per cent in 2019, official data showed last week.

But hopes are high that easing global trade tensions and the receding risk of a no-deal Brexit will power stronger growth in the months ahead.

But analysts warned that clouds remain on the horizon.

Published in Dawn, January 22nd, 2020