- Christian Schulz, an economist at Berenberg Bank
Following a positive day for the single currency on Tuesday, on Wednesday the EUR/USD currency pair has almost reached an important support level at 1.36, helped by some hawkish comments from Fed members and disappointing data from Europe.
According to a survey provided by the Eurostat, the seasonally adjusted trade balance improved to 16.0 billion euros in November, following a 14.5 billion a month earlier and missing analysts' expectations for a 16.7 billion surplus. Meanwhile, non-seasonally adjusted surplus of the 18-nation economy stood at 17.1 billion euros, up from a downwardly revised 16.8 billion logged in October. Both exports and imports fell 0.2% and 1.3% respectively, while the broader European Union registered even steeper declines in both indicators.
While trade balance did not provide any significant surprises to markets, a report from German statistics office raised concerns about the stability of the ongoing recovery. Figures showed Europe's powerhouse, Germany, expanded just 0.4% last year. This is almost twice less than a 0.7% growth recorded in 2012. Moreover, last year's budget deficit was 0.1% of economic output, compared with estimates for a balanced budget. Nevertheless, this outlook is rosy, with vast majority of experts expecting a 2% expansion, while official figures go for 1.7%.
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