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The eurozone’s foreign trade deficit is a problem. Indicators have risen to an anti-record.

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the eurozone's foreign trade deficit is a problem

The eurozone’s foreign trade deficit is a problem. The negative balance of foreign trade in goods rose to 50.9 billion euros, according to preliminary data from the Statistical Office of the European Union (Eurostat). By comparison, in July the deficit was 34 billion euros, and in August 2021 there was a surplus of 2.8 billion euros.

The eurozone foreign trade deficit and the impact on EU economies

The figure rose to a record high as a result of a significant increase in imports due to a jump in gas prices.

Eurozone countries increased imports of goods by 53.6% year-on year to €282.1bn and exports by 24% to €231.1bn the month before last.

The foreign trade deficit of the European Union in August was 64.7 billion euros, compared to 7.1 billion euros a year earlier. The volume of imports increased by 56.4% to 271.8 billion. Exports rose by 24.2% to 207.1 billion.

During the period from January to August, the EU countries increased imports by 49.9%, to 1.967 trillion euros. Purchases of energy rose 2.5 times, food, and drinks – by 27.5%.

Exports from the EU countries for the eight months of this year grew by 18%, to €1,657 trillion. The balance of EU foreign trade deficit in January-August amounted to 310 billion euros against a surplus of 91.8 billion euros a year earlier.

The deficit in the balance of the EU in trade with Russia over eight months amounted to 115 billion Euros (37.3 billion Euros a year ago). Imports to the Russian Federation from the EU since the beginning of the year increased 1.6 times, to €153bn; exports to the country decreased by 34.3%, to €38bn.

The EU’s balance deficit in trade with China increased to €259bn from €139.8bn a year earlier.

Earlier we reported that the strengthening of the dollar will stop only with the beginning of the global economic recovery.


Asia FX weakens as dollar recovers amid waning rate cut cheer

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on– Most Asian currencies retreated on Friday as the dollar recovered a measure of recent losses after a string of Federal Reserve officials warned that bets on interest rate cuts may be premature. 

While the greenback was still headed for some weekly losses, it was trading well above a one-month low hit on Thursday. U.S. Treasury yields also rebounded, pressuring risk-driven markets.

Regional factors also weighed on Asian currencies, as economic data from China and Japan underwhelmed.

Chinese yuan weak amid mixed economic prints 

The Chinese yuan’s pair rose 0.1%, moving back to six-month highs above 7.22.

Economic readings from the country continued to offer middling signals on an economic recovery. Data on Friday showed grew more than expected in April.

But other readings showed growth in slowed sharply, while a decline in Chinese accelerated last month. 

Chinese also grew less than expected in April, while fell from a seven-month high, but still remained relatively high. 

The readings presented a mixed outlook for Asia’s biggest economy. They also came after the U.S. imposed higher tariffs on key Chinese industries, sparking fears of a reignited trade war between Beijing and Washington. 

Concerns over China weighed on other currencies with trade exposure to the country. The Australian dollar’s pair fell 0.2%, while the South Korean won’s pair rose 0.7%. 

The Singapore dollar’s pair rose 0.1% after the island state’s grew at a slower-than-expected pace in April, and also contracted sharply from last year. 

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Weakness in the Japanese yen deepened after weaker-than-expected gross domestic product data for the first quarter. The pair rose 0.3% and was close to breaking above 156, extending sharp overnight gains.

Dollar recoups most weekly losses as Fed downplays rate cuts 

The and rose 0.2% each in Asian trade, extending an overnight rebound from one-month lows.

The dollar’s recovery came as several Fed officials, specifically members of the bank’s rate-setting committee, said that they needed much more confidence that inflation was coming down, beyond some easing inflation in April.

This saw traders scale back bets on a September rate cut, albeit slightly, according to the . 

Still, the dollar was set to lose about 0.7% this week, following some softer-than-expected data for April. The reading, coupled with soft data pushed up hopes that inflation will cool in the coming months.

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Dollar steadies, but on track for sharp weekly loss

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on – The U.S. dollar edged higher in European trade Friday, but was on track for a hefty weekly fall after cooling inflation and weak retail sales brought Federal Reserve rate cuts back into focus. 

At 04:10 ET (08:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 104.580, marginally above a five-week low just below 104 seen earlier this week.

Dollar steadies after hawkish Fed speak

The dollar has recovered to a degree as several Fed officials, specifically members of the bank’s rate-setting committee, said that they needed much more confidence that inflation was coming down, beyond some easing inflation in April.

“I now believe that it will take longer to reach our 2% goal than I previously thought,” St. Louis Federal Reserve president Loretta Mester said on Thursday, adding that further monitoring of incoming data will be needed. 

Federal Reserve Bank of New York President John Williams agreed with this view. 

“I don’t see any indicators now telling me … there’s a reason to change the stance of monetary policy now, and I don’t expect that, I don’t expect to get that greater confidence that we need to see on inflation progress towards a 2% goal in the very near term,” Williams said.

However, the dollar is still on course for a weekly loss of around 0.7% after the milder than expected U.S. data raised expectations the will deliver two interest rate cuts this year, probably starting in September.

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U.S. were also flat in April and softer-than-expected, and manufacturing output unexpectedly fell.

“Our view for the near term remains that we could see a further stabilisation in USD crosses as markets await the next key data input: April core PCE on 31 May,” said analysts at ING, in a note.

Euro slips ahead of CPI release

In Europe, traded 0.1% lower to 1.0860, having traded as high as 1.0895 in the wake of U.S. inflation release, but the single currency is still up around 0.9% on the dollar this week.

The final reading of the is due later in the session, and is expected to show inflation rose by 2.4% on an annual basis in April.

The is widely expected to cut interest rates in June, but traders remain unsure of how many more cuts, if any, the central bank will agree to over the course of the rest of the year.

Traders have priced in 70 basis points of ECB cuts this year – a lot more than the just under 50 bps of easing priced in for the Fed.

fell 0.1% to 1.2658, but is still on track for gains of around 1% this week.

The Bank of England is also expected to cut rates from a 16-year high this summer, but volatility is likely to be limited ahead of the release of key U.K. inflation figures next week.

Yen slips after weak Japanese GDP data

In Asia, rose 0.3% to 155.87, close to breaking above 156, after weaker-than-expected Japanese data for the first quarter. 

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traded 0.1% higher at 7.2209, moving back to six-month highs above 7.22 after data earlier Friday showed grew more than expected in April, but growth in slowed sharply, while a decline in Chinese house prices accelerated last month.


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ING anticipates EUR/GBP rise as BoE rate cut bets increase

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Broker ING noted the potential downside risks for the British pound, noting the currency’s recent decline from its peak against the euro. The GBP’s sensitivity to the performance of US equities was highlighted as a contributing factor to its movement.

The firm also observed a decrease in volatility for the pair as the market anticipates the release of key Consumer Price Index (CPI) figures in the UK scheduled for next week.

ING’s UK economist suggests that there may be a dovish tilt in expectations for the Bank of England’s (BoE) monetary policy. The firm maintains a favorable outlook on the possibility of the EUR/GBP pair rising, as market participants might increase their wagers on a potential interest rate cut by the BoE in June.

The British financial markets were focused on a speech delivered by Catherine Mann of the BoE, who is regarded as the most hawkish member of the Monetary Policy Committee (MPC).

This event followed comments made by Megan Greene, who recently shared a cautiously optimistic perspective on inflation, mirroring sentiments expressed by BoE Governor Andrew Bailey at the last meeting.

ING’s commentary comes as investors and analysts closely watch the central bank’s moves, which could significantly influence currency valuations. The anticipation of UK CPI data and the BoE’s potential response are key factors in the firm’s analysis of the GBP’s trajectory.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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