Euro falling out of favour

The Euro has really fallen out of favour recently as investors have edged away from the single currency. This was further added to this week with the announcement from the FED that they are raising interest rates. The euro has now fallen by over 2% over the last 10 days as investors move away from the concerns in Italy and into the USD on the search for better returns.

European consumer confidence

Later today we have European Consumer spending figures and trade balance. Currently these are expected to stay steady but I would not be too sure if we see an improvement actually seen. I base this as the ECB has recently been hinting at their desire to slow down the Quantities Easing project that they have which would be based on these domestic key data releases. As a result I believe that buying the single currency will get more expensive through today as a result of both this economic release and indeed day traders taking profits from the 2% gave seen recently.

If you are looking to buy the single currency before the turn of the year I am of a view that these current levels available are the top of the range to expect and would move now.

Eurozone into 2017

Longer term I expect the ECB in early 2017 to paint a better picture for the Eurozone’s well-being. I think that they will start to wind down their QE program which would be seen as a massive boost in confidence in the respective economic block.

With the pace of data releases slowing as we enter the festive period, there is a concern however that traders may focus to the overall health of the Eurozone economy.

The topics within Europe to keep an active eye on is the changing economic and political picture in Italy. Concerns are mounting and it seems likely that the long term debt which their banks hold will need to be re-structured in some way, with the world’s oldest trading bank resting its future on the hope of a loan from the Middle East. Plus not forgetting the Greek debt crises has not gone away and the long list of elections taking place through the second half of 2017.

Political and economic uncertainty will continue to be a driving factor behind Euro exchange rates as we approach 2017, clients that have a Euro requirement may look to protect their position by getting in touch with their assigned broker. Call us today on 01494 725 353 or email hse@currencies.co.uk.

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