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Although the euro has depreciated against the dollar from a 2017
peak in early September, it is still up more than 12 percent
this year. Cheaper imports have complicated European Central
Bank's plans to raise inflation in the euro zone.
The European statistics office Eurostat said the 19-country
currency bloc's surplus in goods trade dropped to 16.1 billion
euros ($18.9 billion) in August from 23.2 billion in July. It
was also lower than in August 2016 when it stood at 17.5 billion
euros.
The lower surplus was caused by a surge in imports from
countries outside the euro zone, which grew 8.6 percent on the
year, according to seasonally unadjusted data.
This rise outstripped the 6.8 percent increase in exports,
resulting in a smaller surplus for the euro zone. The August
surplus was the lowest recorded this year, excluding a temporary
deficit in January.
The strong euro, which peaked at nearly 1.20 dollars in August,
contributed to the reduced surplus, as it made imports cheaper.
This in turn capped inflation, making it harder for the ECB to
tighten monetary policy.
Inflation in the euro zone was 1.5 percent in September,
according to Eurostat preliminary estimates, the same rate as in
August and below the ECB target of a rate close to 2 percent.
The ECB is expected to extend its stimulus program for nine
months at its next meeting on Oct. 26 while scaling back the
monthly purchases, sources said.
(Reporting by Francesco Guarascio @fraguarascio; editing by
Philip Blenkinsop)
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