German Imports Fall, Exports Rise as Trade Balance Baloons
Data from Germany released today saw exports rising 2.5% versus the expected 0.5%. Hurt by the falling Euro, imports were at -0.4% while economists had predicted a rise of 0.5%. The data pushed the German trade balance to EUR 16.2B from the expected 12.0B.
Germany has recently struggled with avoiding blowback caused by weakened economies on the European periphery, developments which have decreased export opportunities for the cornerstone German manufacturing sectors. However, the Euro crisis has also in a way benefitted Germany by decreasing the value of the Euro, which allows Germany to export more cheaply to areas that do have demand. While this also has hurt German import capacity, Germany an export-based economy as shown by its trade balance.
Although it remained unaffected by the German trade data, the Euro was bearish on the day as of this report. Although technical studies are warning of a bounce in the Euro, the fundamental picture doesn’t look good and could suggest an impending drop down to the next lows by 1.2500.
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