The euro advanced against the dollar, reversing its decline, after a report showed German investor confidence increased more than economists predicted this month to the strongest in 2 1/2 years.

Europe’s common currency advanced 0.2 percent to $1.3339 at 10:06 a.m. London time, after earlier falling by 0.4 percent.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 31.5 from 6.9 in December. That’s the highest since May 2010. Economists forecast a gain to 12, according to the median of 39 estimates in a Bloomberg News survey.