German analyst and investor sentiment climbed more than expected in August, a survey showed on Tuesday, suggesting Europe's largest economy is regaining momentum after suffering a contraction in late 2012 and a weak start to 2013.

The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment rose to 42.0 from 36.3 in July, reaching its highest level since March and beating the consensus forecast in a Reuters poll for it to increase to 40.0.

The euro rose after the data was released while Bund futures extended their losses.

The index was based on a survey of 252 analysts and investors conducted between July 29 and August 12, ZEW said.