Eurozone trade surplus and healthy employment prop up EUR/GBP, dollar holds firm

Euro zone trade surplus has been at record high but does not seem to last in future, the euro-zone's goods trade surplus rose to a record high in July, adding to the evidence that the economy got off to a good start in Q3. But we suspect that the trade surplus will fall in the second half of the year as the effects of the weaker euro fade.  

The euro-zone's seasonally-adjusted goods trade surplus rose from €21.9bn to €22.4bn in July stronger than the consensus forecast but broadly in line with our own. Exports and imports both declined on the month. But annual export growth of 6.8% was still well above the 1.3% annual increase in imports.

Meanwhile, labour market data released today for Q2 confirmed that the jobs recovery continued at a pretty slow pace. Granted, employment growth picked up from 0.2% q/q in Q1 to 0.3% q/q, taking employment to its highest level since Q2 2011. But this is still pretty slow.

As a result, EURGBP takes off from day lows at 0.7312 while leading oscillators show positive convergence to the current price spikes at 0.7340. But above trade numbers are not suffice to push EURUSD for healthy gains if you compare this with EURGBP.