The Euro’s powering a balance of payments boom – Société Generale
20.08.2024, 15:30

The Euro’s powering a balance of payments boom – Société Generale

Europe’s current account surplus reached EUR 51bn in June, EUR 370bn (2.5% GDP) in the 12 months to June. Including what is happening with the capital account, the data show that European MFIs increased their holdings of foreign assets by EUR 547bn in the last year, and for what it’s worth, the Euro system’s reserves are now EUR 1,267.5bn, Société Generale FX strategist Kit Juckes notes.

Europe’s impressive balance of payments

“This balance of payments boom is a reaction to the Euro’s collapse in 2022. EUR/USD fell from 1.24 to 0.96 amidst a shocking terms of trade crisis and a US economic recovery. Since then, the terms of trade have improved, the trade position has recovered, but the currency, even at 1.10, is only half-way back to where it was against the dollar.”

“The current account position is a combination of a ‘cheap’ currency and a lack of European demand. European imports are 25% lower than they were at the peak of the energy crisis. The capital account data, meanwhile, highlight the enthusiasm with which European investors have been buying foreign assets.”

“If Europe could run this kind of balance of payments with a combination of stronger domestic demand and strong domestic investment, the Euro would be heading back to 1.30. But even so, the message of the data is that the Euro has recovered less from the 2022 terms of trade shock, than the Eurozone economy has. That helps put a floor under the Euro.”

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Izvršenje trgovinskih operacija sa finansijskim instrumentima upotrebom marginalne trgovine pruža velike mogućnosti i omogućava investitorima ostvarivanje visokih prihoda. Međutim, takav vid trgovine povezan je sa potencijalno visokim nivoom rizika od gubitka sredstava. Проведение торговых операций на финанcовых рынках c маржинальными финанcовыми инcтрументами открывает широкие возможноcти, и позволяет инвеcторам, готовым пойти на риcк, получать выcокую прибыль, но при этом неcет в cебе потенциально выcокий уровень риcка получения убытков. Iz tog razloga je pre započinjanja trgovine potrebno odlučiti o izboru odgovarajuće investicione strategije, uzimajući u obzir raspoložive resurse.

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