by David Pewes
UK sterling has fallen -0.4% to 1.3472 versus the euro today, although it still remains just a cent from its highest against the common currency in 7 years, or since December 21st 2008.
The pound has fallen, chiefly because the Eurozone recorded an unexpectedly large trade surplus in December. The trade surplus of the 19-nation currency bloc hit +€23.4bn in the last month of 2014, according to official statistics body Eurostat. This was +€3.8bn more than forecast, the fifth consecutive monthly rise, and the Eurozone's largest trade surplus on record.
The Eurozone trade's surplus rose, chiefly because exports jumped +8.0% in December compared to 12 months before, while imports rose just +1.0%. This suggests that Eurozone firms are benefiting greatly from the low value of the euro, and so selling more good abroad. This thereby lifted the euro because, in spite of the Eurozone's current weakness, it nonetheless bodes well for the currency bloc's economic future.
