EUR/USD – French deficit and Dutch surplus shrink

on Aug 12, 2013

**, Monday 12 August:**

France’s Trade Balance for June was logged today showing a deficit of €1.4 billion, comfortably beating expectations for a shortfall of €3.2 billion. May’s negative trade gap of €3.5 billion, was revised up from -€4.1 billion. Although the deficit shrank from May to July, the French Trade Balance has not shown a surplus since 2004, while the German economy has been consistently producing positive trade balances since the implementation of the euro. According to Bloomberg analysts, the divergence of the ‘’core’’ Eurozone countries’ trade balances points to the French need for a currency 20 percent weaker than the euro, while Germany should have a 50 percent stronger currency.

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The Dutch Current Account for June came out worse than the prior surplus of €4.59 billion with an actual positive trade gap of €3.5 billion.
After reaching as high as 1.3399 on 8 August, the EUR/USD has been in a downward trend that has continued today, with the pair currently holding around 1.329 or 0.40 percent down for the day. The euro has not been able to surge through the solid resistance around 1.34 for the last 5 months.
In the US, the Federal Budget Balance for July is scheduled for 19.00 BST, with analysts expecting a deficit of $94.0 billion compared to the $116.5 billion surplus in June.


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