The Euro is coming under increasing pressure, owing to political and global factors. Of particular relevance this weekend was the G20 Summit and also the French fuel protests. These are two key factors that may influence Euro rates going into this week and further ahead in December.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR3%€2,300

The G20 meeting is key because part of the agreement was for the US to form better relations with China to try and stop the trade wars deteriorating. What we have seen is the US agreeing a ceasefire with China, which has helped the US Dollar to strengthen and weakened the Euro. EUR/USD is the world’s most heavily traded currency pair and the shift on the US Dollar has weakened the Euro.

France is key because with Merkel having taken steps back from Government there has been a vacuum of power in the upper echelons of European Government. Who will fill those important boots and represent the EU and Eurozone's drive to come closer together? Possibly not French President Macron who is currently facing calls to resign following widespread riots across France and in the capital Paris.

If Macron fails to get control of the extremist elements in society, it will open the door for the more extreme elements to get into power. Macron gained Government on a promise of a ‘third way’ which so far is not being realised.

Spanish political turmoil adds to Euro woes

Spanish political turmoil adds to Euro woes

Another political concern this weekend for the Euro is Spain. A far-right party has won seats in the Andalusian region. Going by the name of Vox, the party won 12 of the 109 seats in the regional election.

Migrant issues are once again a cause for popularity of such parties and this is another example of the shift in the politics in the Eurozone, which could ultimately see the Euro weaken if it leads to fracturing of the existing order.

Key events in Europe are the ECB interest rate decision and conference next Thursday. The ECB are promising to withdraw the QE plan but the market is suspicious of the viability of this.

Clients looking to buy or sell Euros today, this month or even next year should ensure they are up to date with the latest news to ensure they are not wrong-footed by sudden changes in sentiment.

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