France is yet again victim of terrorist attacks, how will these continuous attacks impact the mood of other EU members now the UK have decided to leave the EU?

How will the Euro fare with this climate of widespread terrorism?

Another attack in France, the fourth terrorist incident in Europe since the carnage brought to Nice on July 14th, is creating a disturbing regularity to the content of our currency reports produced for our customers.

This time hostages were taken inside a church near Rouen by two men wielding knives. Both attackers were killed, and tragically so was the resident Priest.

In times when attacks are not so prolific and repetitive, terrorist attacks are normally heavy market movers, as the resulting panic and caution causes capital to fly out of the victim country. Yet repetition seems to have dulled market reaction to the news.

However, whilst such events do not seem to be affecting rates directly, they are obscuring positive news for the Eurozone. For example yesterday data on business conditions in Germany came out yesterday morning, which showed improvements for the seventh straight month, yet barely a blip was registered on the Euro’s value. It seems that these horrible attacks are taking attention away from positive developments in Europe, leaving the Euro in a form of limbo.

Can we expect buying Euro rates to remain stagnant?

The final two weeks of each month always has lower volumes of economic information for markets to work with. In reference to the Euro much of this is also focussed on individual countries rather than the Eurozone as a whole. We’ll be getting a taste of this more significant macro data as next month begins.

In a few days stress tests will be conducted on all Eurozone banks, and with Italian Banks very publically being denounced for the severe risk they have put themselves in by holding such large quantities of ‘junk’ debt, this may spell poor news for the Eurozone. Euro buyers may wish to discuss the potential this may have to improve their situation with their account manager, and the options open to them to seize any attractive levels which emerge immediately.


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