Eurozone: Officials looking to avoid trade surplus elephant in the room - ING

Viraj Patel, Research Analyst at ING, suggests that in a fairly quiet week for data and events, there will be some focus on the Euro Area Finance Ministers meeting today – where exchange rates and presumably protectionism will be discussed.

Key Quotes

“With the Eurozone enjoying a massive 3.5% GDP current account surplus and the EUR not particularly volatile, we suspect it will be very hard for EZ finance officials to talk down the EUR. In fact, the latest set of ECB staff projections has the EZ’s current account surplus rising to 4.5% in 2020. Provoking the ‘trade war general’ currently residing in the White House may not be the best form of attack (the Tweeter-in-Chief did allude to the EZ trade surplus over the weekend – with an added treat of US tariffs on EZ auto exports).”

“Look for EUR/USD to remain supported this week around the 1.2250-1.2300 area – with the post-ECB move lower a good opportunity to buy again.”