All Trade Ideas and trading scenarios found on FX360.com are hypothetical. FX360.com has not placed these Ideas in a live trading environment. Forex Trading involves high risks, with the potential for substantial losses that exceed your initial deposit and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

German Trade Slows as Euro Rises

Last updated 6/9/2009 3:50 AM ET (GMT -5) 1 Comments

German Trade and Current Account Balances printed weaker than expected as export fell more than forecast in the month April. Sales abroad adjusted for days worked fell 4.8% versus 0.3% in March as the combination of a strengthening currency and crimped global demand weighed on the country’s crucial export sector.

The Trade balance narrowed to 9.4 billion euros from 11.3 billion euros the month prior but was actually slightly better than the forecast of 9.3 billion euros. The current account meanwhile declined to 5.8 billion form initial projections of 10.0 billion. Overall, despite rebounding off the lows set in January, the German export sector continues to struggle as final demand remains lackluster and the more than 15% appreciation in exchange rates since March is clearly making it more difficult to sell goods into the GCC and China as both regions remain pegged to the dollar.

The economic news however did not have a negative impact on the EUR/USD, with the pair lifted higher at the start of European trade by better risk appetite flows. Nevertheless 1.4000 now remains a significant barrier and tonight’s economic news which suggests high exchange rates will slow the pace of improvement in EZ largest economy going forward could make it more difficult for the pair to recapture its recent highs.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Futures & Forex, Ltd. (“GFT Markets”) and FX360.com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of GFT Markets, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. GFT Markets and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

Comments (1)

Bruce

June 09, 2009 at 10:43 AM ET

Boris - the continuing rise in oil seems inevitable, and with oil and the euro$ pair seemingly tied at the hip, a strengthening euro seems inevitable as well. However, can oil and euro$ decouple? Must we assume oil's inevitable rise = higher euro$? Are they psychologically or fundamentally linked? Thank you.

About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.

MARKET NEWS ALERTS

Receive daily commentary, technical analysis reports and potential strategies from our team of market strategists and technical analysts.

Your first name:
Your last name:

Country:

Area code:
Phone:

Your email address:

Already getting alerts but don't have a FX360 account? Manage your subscriptions by creating an account now.

Already have an account? Manage your subscription here.