Eurozone portfolio story doesn’t look that bad for EUR – ING


ING analysts suggest that away from the FX options market, the Eurozone Balance of Payments story should, in theory, be a little more positive for the EUR.

Key Quotes

“The Eurozone still runs a large current account surplus (2.7% of GDP) and instead of this being re-cycled out of the Eurozone via Direct Investment and Portfolio outflows – which was certainly the case over the last couple of years – these outflows have declined markedly.”

“For example, on a twelve-month basis Eurozone direct investment outflows of EUR180bn have reversed to EUR85bn of inflows over the last year. EUR211bn of portfolio investment outflows have reversed to EUR15bn of inflows over the period.”

“We’d characterise most of this activity as ‘de-leveraging’, where Eurozone residents have cut overseas investments in a more significant number than foreigners have cut investments in the Eurozone. In theory that should have been positive for the EUR, but it clearly hasn’t. We think ‘hot money’ or short-term money market flows explains a lot.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD rebounds after dismal US PMIs

EUR/USD is trading closer to 1.0850, rising in response to weak US PMIs, with the services one pointing to contraction. Earlier, German Manufacturing PMI beat estimates. 

EUR/USD News

GBP/USD advances to 1.2950 after US data

GBP/USD is trading around 1.2950, taking advantage of US weakness stemming from a downfall in Markit's Services PMI in the US. In Britain, the Manufacturing PMI exceeded estimates. 

GBP/USD News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Consolidation process underway

The Crypto board continues to be immersed in an emotional leg-breaking, consistently punishing the emotional state of the traders with its continuous changes of direction.

Read more

XAU/USD unstoppable, breaks to fresh 2020 highs, approaching $1650/oz

XAU/USD is trading in an uptrend above its main daily simple moving averages (SMAs) while breaking above a bull channel. Gold is printing fresh 2020 highs hitting $1646.64 per ounce on an intraday basis.  

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures