The euro rose against the dollar and sterling after economic data showed that the euro zone current account recorded a surplus that was much larger than expected, to reach the highest level in five years, basically since March 2007.
January’s current account grew to 4.5 billion euros from December’s revised 3.4 billion surplus. The forecast by the ECB was slightly lower at 3.3 billion euro surplus.
The data are adjusted for seasonal effects and take account of the number of working days in each month.
The report showed that the increase on the balance sheet was mostly driven by a surplus for goods, services and income. There was a deficit for current transfers but was not sufficient to outweigh the other accounts.
The data helped support EURUSD, which was lifted to 1.3164 within an hour of the news from pre-data levels of 1.3142. EURGBP rose to 0.8312 from 0.8298, also within an hour of the data.
The strong euro area current account data seemed to offset weak Italian industrial orders data, which showed a sharp drop in January. Industrial orders dropped 7.4 percent in January from December in seasonally adjusted terms, while falling 5.6 percent from January 2011 in unadjusted terms.