Strong Data from Germany Fails to Support Euro

Despite upbeat data on the eurozone economy, the EUR/USD pair still cannot return to its previous highs. After breaking through the level of 1.1610, the single European currency immediately fell below 1.16 and continues to trade close to this level. Strong data on Germany’s trade balance did not support the pair. According to official data, the German trade surplus rose to 21 billion 800 million euros in September. Economists had expected a smaller increase. Export decreased by 0.4%, while imports fell by 1%. Meanwhile, market participants focused on the ECB monthly report, which came in line with the expectations of the economists.

The ECB officials noted the rapid growth of the eurozone economy. However, they also pointed to slow inflation, which indirectly limits growth of the euro. After the ECB meeting, where the monetary policy was discussed Mario Draghi stated that consumer prices have not yet shown a stable growth to the 2% target. As a result, the bank remains cautious about the key interest rate. In addition, the ECB’s decision to maintain the quantitative easing program for another 9 months puts a downward pressure on the EUR/USD pair. Currency strategists believe that the euro will remain unpopular among traders for a long time. Moreover, the EUR/USD pair might remain under the bearish influence until the Fed’s meeting in December.

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