Euro's Rise Hasn't Yet Hindered Eurozone Economy

By Paul HannonFeaturesDow Jones Newswires

The eurozone's trade surplus widened in June, an indication that the euro's recent rise against other major currencies has yet to hinder economic growth.

The European Union's statistics agency Thursday said that after adjusting for seasonal patterns, eurozone exports fell 1.9% in June from May, but imports were down 4.1%. As a result, the currency area exports of goods exceeded its imports by 22.3 billion euros ($26.17 billion), a widening from the EUR19 billion surplus recorded in May.

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Without seasonal adjustment, the surplus was EUR26.6 billion, down from EUR28.9 billion a year earlier.

The eurozone economy has enjoyed a surprisingly strong 2017, with growth accelerating in the three months to June and becoming more broad based. That has fueled expectations that the European Central Bank will start to wind down its purchases of government bonds from January. Since that would slow the supply of new euros, the currency has strengthened against the U.S. dollar and the British pound over recent months.

That appreciation threatens eurozone businesses that sell their products overseas, since it makes them more expensive to foreign buyers. While the June figures suggest exports may be starting to falter, the larger drop in imports means growth hasn't yet been retarded by that development.

A separate data release from Eurostat confirmed there are few signs the pickup in growth has transformed the outlook for inflation, which at 1.3% in July was well below the ECB's target of just under 2%.

Write to Paul Hannon at

(END) Dow Jones Newswires

August 17, 2017 05:15 ET (09:15 GMT)