German business morale improved in July for the third straight month in a row, figures from the Ifo institute released on Thursday showed.
The Business Climate Index rose to 106.2 in July, above expectations of 106.1. In June, the figure was 105.9.
The euro jumped to 1.3235 against the dollar after the data was released, but then fell back to 1.3187.
The monthly index from the Ifo think tank surveys 7,000 firms to get a consensus of business confidence among manufacturing and services industries.
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The figures for business climate and conditions rose from the previous month. Business expectations declined slightly, to 102.4 in July from 102.5 in June.
"In total, the conditions in the German economy remain fair, manufacturing is relatively strong and the retail sector, which has not been so strong, is picking up," Gernot Nerb, researcher at Ifo, told CNBC. "The construction sector is in a strong upswing…the consumer is also spending more…domestic demand is relatively buoyant."