German Export Data Strong, Imports Worrisome

The euro continued on a high on Thursday morning as investors turned a critical eye toward the German economy, which is expected to help pull the region out of its longest ever recession. The common currency rose to a seven week high after German data indicated that the powerhouse economy was on the mend. Reuters reported that German exports grew by 0.6 percent in June, but the figure fell short of economists' forecasts of a one percent rise. The data came shortly after reports of increasing industry orders and output; and added to growing hope that the eurozone is headed for stability in the second half of the year. While the German economy has traditionally relied on exports for its strength, many were concerned to see that imports slipped 0.8 percent in June. The import data confirms that domestic demand is still a problem for Germany and could be a major stumbling block for the nation. The International Monetary Fund recently met with German policy makers for its annual review and encouraged the country to focus more on promoting internal demand. The fund pointed out that with an economy so heavily focused on exports, weakness in the eurozone could hold up Germany's progress. The recent export and import data supports the IMF's warning as although German exports climbed, the breakdown was a bit concerning. Exports to neighboring eurozone countries were down by 1.4 percent in June, something German officials will need to consider as 41 percent of the nation's exports are sent to members of the bloc.