BERLIN, Aug 7 Reuters Investor morale in the euro zone unexpectedly rose in August, ending three consecutive months of decline as inflation has lost some of its explosive power, but there are no signs of a lasting turnaround in sentiment, a survey showed on Monday.

Sentix39;s index for the euro zone rose to 18.9 points in August from 22.5 in July, beating expectations of analysts polled by Reuters of a further drop, to a reading of 24.3.

Germany in particular has become the sick man of the euro zone and is weighing heavily on the region, said Sentix managing director Patrick Hussy, with investor morale in Europe39;s largest economy falling to its lowest level since October 2022.

The subindex for future expectations in the euro zone rose 7.3 points to 17.3, which Hussy attributed to easing in the expected rate of deterioration rather than positive sentiment.

The more lenient view of the next six months is because investors see the issue of inflation as losing some of its explosive power, said Hussy, though there are not yet signs that the situation will continue to head in the right direction.

The economy in the euro zone remains in recession mode. There can therefore be no joy about this development, he said.

The poll of 1,202 investors was conducted between Aug. 35, according to Sentix.

Reporting by Miranda Murray, Editing by Rachel More

Source Reuters