The Pound (GBP) has consolidated yesterday’s gains against the Euro (EUR) today and remained elevated following news that Germany’s imports and exports fell sharply in September.
Data released this morning showed that, while the Eurozone’s largest economy racked up a larger trade surplus in September, the data hid the fact that both exports and imports had fallen, with the former contracting unexpectedly by 0.8%.
This contraction has concerned Euro investors as it could point to slowing German GDP growth, and the blame has been squarely placed on slowing global demand for finished goods in the face of trade uncertainties caused by the dispute between the US and China.
Carsten Brzeski, Chief Economist ING Germany explained how today’s figures will affect the outlook for the German economy: ‘Today’s trade data ends a disappointing week for German industry. Available monthly data suggests that the economy had its worst quarterly performance in 3Q since the beginning of 2015.’
While the Pound broadly fell against most of the majors today, this unwelcome news from Germany has kept the GBP/EUR pairing on an even keel, with the inter-bank exchange rate remaining around €1.148.