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German Trade Provides Early Boost To The Euro

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German Current Account Balance soared in June rising to 12.9 Billion euros versus 1.8 Billion in May and far higher than the 5.5 Billion projected by analysts. German trade balance also improved markedly to 12.3 Billion versus 10.6 Billion the period prior.

The growth in the surplus was driven by strong rise in exports which increased 3.8% on seasonally adjusted basis as demand from Asia and Middle East remained robust. Germany's trade numbers were also boosted by favorable exchange rate differentials with the euro trading near 1.2000 during the month. The single currency has since appreciated by more than 10% rising above 1.3300 in the wake of Friday's weak NFP numbers and the it remains to be seen if Europe's largest economy can maintain this pace of export growth with the euro at the current levels.

The EUR/USD responded positively to the news rising to 1.3300 in the aftermath of the release as traders continued to favor the unit over the greenback with the view that EZ economy is performing relatively better than that of the US. The euro is also drawing strength from concerns that the Fed may begin to ease US monetary policy further in the wake of anemic NFP data last Friday. With all eyes on tomorrow's FOMC meeting the EUR/USD should remain well bid for the time being.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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