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Euro Area's Trade Balance Improves Further

The trade balance of the Euro Area improved significantly in November, reaching a surplus of EUR 20.3 billion, up from EUR 11.1 billion in October. This marks a substantial improvement compared to the EUR 13.8 billion deficit recorded a year earlier.

Imports decreased by 16.1% to EUR 2,327 billion, primarily due to a significant drop in energy products (-33.6%), raw materials (-22.9%), and machinery & vehicles (-1.3%). Meanwhile, exports remained relatively stable at EUR 2,352.5 billion. Notably, there was a 9.1% increase in machinery & vehicles, which helped offset declines in other manufactured goods (-2.8%) and chemicals (-4.9%). Our Take: The trade balance is returning to normal following the energy price shock decline for most of 2022 and 2023. This trend is likely to continue barring another energy price shock.

This removes one key impediment to a Euro rebound. Looking for a reason to be bullish EURUSD? At least this is one to be less bearish.


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