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The Merino is an economically influential breed of sheep prized for its wool. Merinos are regarded as having some of the finest and softest wool of any sheep. The term merino is widely used in the textile industries with varied meanings.

Originally it denoted the wool of Merino sheep reared in Spain, but due to the equivalent quality of Australian and New Zealand wools, the term now has broader use. In the dress-goods and knitting trades, the term "Merino" means an article containing Merino wool.

Merino is excellent at regulating body temperature, especially when worn against the skin. The wool provides some warmth, without overheating the wearer. It draws moisture (sweat) away from the skin, a phenomenon known as wicking. The fabric is slightly moisture repellent (keratin fibers are hydrophobic at one end and hydrophilic at the other), allowing the user to avoid the feeling of wetness.

Like cotton, wool absorbs water, but, unlike cotton, wool retains warmth when wet. Like most wools, merino contains lanolin which has antibacterial properties. Merino is one of the softest types of wool available, due to finer fibers and smaller scales.