Germany's ZEW economic sentiment index rose to 34.2 in August, beating expectations of 32.0 and marking a third straight monthly increase, while the current-conditions gauge improved slightly to -68.9 from -68.0. The eurozone reading also climbed to 34.2 from 28.5 as easing inflation, lower energy prices and hopes the European Central Bank may pause interest rate hikes lifted investor optimism, even though the survey measures expectations rather than hard data. The brighter mood comes against a weak backdrop that includes a slight second-quarter contraction in Germany and subdued manufacturing demand. After the release, the euro edged higher against the dollar and German bond yields posted modest gains, while an earlier version of the story cited different comparison figures for July, forecasts and current conditions, alongside comments from ZEW President Achim Wambach and Helaba Research economist Ulrich Wortberg that pointed to export support, infrastructure spending and ECB tightening expectations.