In another sign that the Eurozone’s largest economy is helping the currency bloc emerge from recession, data compiled by the Federal Statistics Office showed an increase in German exports in August.
On a seasonally adjusted basis, the nation’s exports were up 1 per cent in August (month-on-month) following a revised decline of 0.8 per cent in July.
The result was slightly below economists’ expectations for an increase of 1.1 per cent, but was still a positive indication that improving global economic conditions are allowing the German economy to gather momentum.
However, figures also showed a narrowing in Germany’s trade surplus, from 16.2 billion Euro’s in July to 13.1 billion Euros in August.
The Euro/Pound Sterling pairing is currently trading in the region of 0.8443
The result promoted this response from senior economist Anatoli Annenkov; ‘Germany is still strong and expanding. Growth slowed in the third quarter and the political debate in the US poses some risks to Germany as an export-oriented nation, but I don’t think the impact will be significant unless the shutdown continues for an extended period.’
While the Euro continued to trade higher against the Pound and US Dollar after this report was published, with German factory orders data still to be released further common currency fluctuations are likely.
The federal shutdown in the US is still weighing on the currency market, with investors wary of higher-risk assets due to fears that the world’s largest economy could default.
Although leading industry analysts don’t expect a default to occur, US President Barack Obama did little to allay concerns during the North American session. Obama asserted that he will not enter into debt ceiling negotiations with the Republicans, stating; ‘We’re not going to negotiate under the threat of economic catastrophe’.
But the October 17th deadline is fast approaching, so if the US government wants to avoid a potentially cataclysmic economic situation someone is going to have to back down.
The EUR/GBP pairing will largely be driven by Eurozone news today, but investors will also be looking to tomorrow’s UK manufacturing/industrial production reports.
Euro (EUR) Exchange Rates
As of 09:20
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3567 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8443 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4365 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6374 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4006 >