- Euro (EUR) slipped after exports jumped 4.7% mom in July but import growth slowed to just 1.1%
- Both imports and exports remain 11% down on pre-covid levels
- US Dollar (USD) holding mild gains waiting for the US stock market open
The Euro US Dollar (EUR/USD) exchange rate is extending losses for a 6th straight day. The pair settled on Monday -0.14% at US$1.1817. At 07:30 UTC, EUR/USD trades -0.03% at US$1.1813.
The Euro is mildly lower following a mixed trade report from Germany. German exports jumped 4.7% month on month in July, as the post covid recovery continues. The pick-up in demand echoes the strong exports reported in China and is a descent sign that Germany’s economy has returned to economic growth after GDP shrank 10% in the second quarter.
Imports were less encouraging increasing just 1.1% a sign that domestic demand is still weak. Notably, imports and exports in the Eurozone’s largest economy are still 11% lower than where they were a year ago.
Delving deeper into the report, trade with China has rebounded strongly, while imports from the UK have plunged by 25% year on year.
The data comes after German industrial production figures in the previous session, revealed that output lost pace in July. German industrial production rose much less than expected with output remaining well below pre-covid levels
Attention will now turn to the Eurozone GDP reading for the second quarter. This is the second reading and is expected to confirm the initial forecast of -12.1% contraction QoQ.
The US Dollar rose versus its major peers on Monday despite the US public holiday. Gains remain limited for the safe haven given the improved risk appetite in the broader market. Attention will be firmly on how the US stock market opens later today after the deep tech rout of last week.
There is no high impacting US data due for release today. Investors will look ahead to Thursday’s jobless claims and Friday’s inflation reading for further clues over the health of the US economy.