EUR/USD dips as Eurozone trade surplus narrows to €1.0 billion

EUR/USD declined 0.2% to 1.0980 after Eurozone trade data revealed a sharp deterioration in the bloc's trade balance. The August trade surplus plummeted to €1.0 billion from July's revised €12.7 billion, significantly below market expectations. The decline was primarily driven by a collapse in machinery and vehicle exports, which fell from €18.0 billion to €7.8 billion. Year-to-date figures remain positive, suggesting the August reading may be an anomaly rather than a trend reversal. The euro found support at 1.0975, near the daily pivot point, while resistance emerged at 1.1000. Market participants are reassessing ECB rate cut expectations, as weakening trade dynamics could pressure the central bank toward more accommodative policy. The disappointing trade figures add to concerns about Eurozone economic momentum heading into the fourth quarter.