A key poll of German business confidence declined in August, as managers at around 7,000 companies in Europe's largest economy fretted about the impact of turbulence in the financial markets. The Ifo poll on the German business climate dropped to 105.8 in August from 106.4 in July, as a decline in expectations more than offset a slight rise in the current situation subcomponent. The decline was fairly modest and wasn't as stark as economists had forecast, and the Ifo Institute said the result still shows optimism over the economy for the next six months. Still, the Ifo said financial markets may have played a role in the fall and noted less optimism surrounding exports, even with the euro retreating a bit vs. the Japanese yen and the U.S. dollar amid credit-market turbulence. Germany is the world's largest exporter, so the country's economy is very sensitive to global demand. The Ifo poll, closely watched because of its historical correlation with Germany GDP, hasn't climbed since April. The decline follows a speech on Monday from Jean-Claude Trichet, president of the European Central Bank, who insisted the bank isn't on a "pre-committed" path to lift interest rates. Trichet has always made that disclaimer, but traders are paying more attention now given the turbulence in recent weeks that has resulted in the ECB injecting billions of euros into the banking system. Trichet also said the ECB pays close attention to market developments. The ECB, which sets interest rates in all 13 countries that use the euro as their currency, is now expected by some to hold interest rates at 4% at its meeting next week, which would be the first time it's not lifted interest rates after using the phrase "strong vigilance" to describe its monetary-policy stance. "(The Ifo poll) is a further stark reminder to the ECB that the euro-zone economy cannot withstand higher rates going any higher," said David Brown, the chief European economist for Bear Stearn