Eurozone Trade Balance Increases, Euro Sees Little Gain
The euro was steady at $1.3346 at 7:00 GMT on Tuesday morning following data out on Monday, which showed that the nation’s trade surplus increased beyond expectations in June.
However, pressure from the ongoing tension with Russia continued to weigh on the currency.
The eurozone’s trade balance increased to 16.8 billion euros in June from 15.7 billion euros last year. The figure indicated that exports rose, suggesting that the bloc was regaining some of its competitiveness.
Despite that, the euro was unable to gain any momentum, as most see the June trade data as an inaccurate picture of the bloc’s current status. The June data does not take into account the sanctions against Russia, something which will likely deal a blow to eurozone exports over the next few months.
The region was already struggling with a patchy recovery before stricter sanctions cut down transactions with one of the eurozone’s largest trading partners.
Also on Monday, The Wall Street Journal reported that Germany’s Bundesbank warned investors that the German economy could continue to feel the effects of geopolitical tension in the third quarter.
Second quarter growth from the eurozone’s largest economy contracted by 0.2 percent, something the German government has blamed on weather conditions and rising global tension.
The Bundesbank warned that prospects for the second half of the year weren’t looking good with tension on the rise between Russia and the West.
Although the German economy had been forecast to grow in the third and fourth quarters, the nation’s central bank now says the current conditions will hit Germany’s economy hard.
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