EUR BoP: Current account at new high – Nomura

The euro area saw the largest current account surplus on record (sa) in September, a trend that shows no sign of easing with the EUR area benefiting from the global economic recovery and a currency that is still undervalued on PPP measures, explains the research team at Nomura.

Key Quotes

“September was when the EUR appreciation trend came to an end and the currency suffered in the weeks that followed over the October ECB meeting as fixed income outflows still dominated. The basic balance has been improving in recent months and improved further in September from a sizeable dip in August. If this basic balance trend continues it should keep EUR supported into the New Year at the same time as the ECB will be looking to normalise monetary policy in the not-too-distant future.”