The euro remained steady against the dollar despite further evidence of a marked improvement in German business confidence. Analysts said much of the pick-up identified in the closely-watched ZEW survey has already been priced in. A growing belief has emerged in recent days that Germany, the euro zone's largest economy, is on the up. Nevertheless the survey from the ZEW Institute did enough to back up that belief. Its economic expectations index, based on a poll of 294 analysts and institutional investors, rose by 13 points to plus 50.0 points in August, against expectations of a more modest rise to 38.0. "An improvement in sentiment is well-priced and hence the euro is unlikely to appreciate notably on the data," said Bank of Tokyo-Mitsubishi analyst Derek Halpenny. Also published this week will be Germany's key IFO business climate survey on Thursday. Any further evidence that Germany is recovering could spark talk about higher interest rates in the 12-nation single currency zone, in sharp contrast to market sentiment only a few months ago. "The strong 13-point rise in the ZEW expectations index points to another strong 1.5-point rise in the IFO index according to the historical five-year relationship," said Kristjan Kasikov, currency strategist at CALYON, who noted that the the correlation between the daily change in euro/dollar and the ZEW surprise is an "unintuitive" -0.16. "The same analysis shows that the IFO survey, which is due on 25 August, has historically tended to be more market moving, with the same correlation between euro/dollar and the surprise standing at 0.63," he added. The euro has been undermined this year on a growing focus on cyclical considerations, especially in relation to the dollar. The US Federal Reserve is widely seen nudging its target lending rate from 3.50 pct to 4 pct or 4.25 pct by year-end. That compares to a 2 pct target in the euro zone that's not expected to change soon.