The euro traded slightly changed and in proximity to over one-week highs against the US dollar on Monday, after Euro zones current account produced a lesser than projected surplus in September, while markets awaited the release of the minutes of Federal Reserve Banks most recent meeting on policy.
EUR/USD rose to a session high at 1.3518 at 9:15 GMT, also the pairs highest point since November 7th, after which consolidation followed at 1.3513, up 0.11% for the day. Support was likely to be found at November 15th low, 1.3433, while resistance was to be encountered at November 7th high, 1.3529.
Earlier on trading Monday an official report revealed that Euro zones seasonally adjusted current account, the widest gauge of international financial transactions for the bloc, registered a smaller surplus than initially expected in the month of September. The surplus amounted at 13.7 billion EUR, following the revised up 17.9 billion EUR in August (17.4 billion EUR previously). Experts had anticipated a surplus of 18.3 billion EUR.
Euro zones seasonally adjusted trade balance, however, produced a larger surplus than expected in September, amounting to 14.3 billion EUR instead of 13.0 billion EUR, while in August the surplus was 12.3 billion EUR. Exports climbed 3%, while imports remained unchanged during September.
Despite the evident decrease, current accounts figure suggested, that still, the common currency zones exports exceeded imports, as less-developed countries in the region were probably more oriented towards export as a driving force of economic growth. Policies focused on austerity, on the other hand, caused pressure upon prices of imported goods. To sum it up, the observed combination of high rate of unemployment, weak inflationary pressure and stagnation in some sectors of the economy, was still causing a negative impact upon recovery.
In addition, at a press conference today, European Central Banks board member Ewald Nowotny said, that economic conditions in the Euro bloc have begun to improve, but yet, at a slower pace than projections, as the current rate of inflation remains below ECBs objective of 2%, which is considered as providing price stability.
Meanwhile, market players awaited the release of the minutes of Federal Reserves October 30th-31st meeting, scheduled for publication on Wednesday.
Federal Reserve Chair-nominee Janet Yellen said in front of the Senate Banking Committee on Thursday, that as US economy was beginning to show progress, rates of inflation and unemployment still have more room to approach central bank’s targets. Market players considered such comments as rather dovish, as it seemed Fed policymakers wanted further solid proof of economic improvement before making a move towards reduction of monthly asset purchases. It is expected by economists, that the central bank will taper its stimulus program as early as March next year.
Elsewhere, the euro was advancing against the sterling, with EUR/GBP cross up 0.20% on a daily basis to trade at 0.8391 at 13:04 GMT. EUR/JPY pair was trading little changed at 135.25 at 13:06 GMT, ticking up a mere 0.02% today.