The eurozone trade deficit dropped sharply to 1.7 billion euros in February despite rising euro (one euro now equals about 1.35 U.S. dollars), the European Union's statistics bureau Eurostat said on Tuesday.

Analysts had expected a deficit of 5 billion euros. It was much lower than the revised 7 billion euros' deficit registered in January. Eurostat previously put the deficit in January at 7.8 billion euros in its first estimate.

Trade deficit stood at 3.3 billion euros in February 2006.

The sharp drop of trade deficit in the 13-nation bloc sharing the same currency was achieved by strong exports.

Compared to the same period of last year, exports of the euro zone increased by 10 percent to 115.7 billion euros, faster than imports, which rose by 8 percent to 117.4 billion euros.

On a seasonally adjusted basis, the euro zone recorded a deficit of 200 million euros in February, from a revised surplus of 1.8 billion euros in January.

With vibrant growth of the eurozone economy and under the market expectation for another interest raise, euro kept rising recently, inching towards an all-time high against dollar on Tuesday and hitting record against Japanese yen on Monday, which fueled concerns of the bloc's exporters.

According to Eurostat, the 27-nation EU registered a trade deficit of 17.6 billion euros in February, down from 26 billion euros in the previous month but slightly up from 16.1 billion euros a year ago.