The EUR is coming under increasing pressure, as tensions between the EU & US are at risk of reaching boiling point over the trade tariffs President Trump has put in place. These restrictions are driving up costs for US manufacturers and accelerating a slowdown for Eurozone factories, according to the latest figures. The EUR itself, which has been a currency of choice for investors in recent times, is fast becoming an unnecessary and unattractive risk. The Euro report below looks into the current trade wars between the US and EU and the current impacts of unrest on the Euro. The table below shows the change in the GBPEUR exchange rates during the past month and the difference in return you could have received when selling £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
Fears of a full-scale trade war between the EU and the US are edging ever closer and this has been mirrored in the current EUR/USD value, which sees the EUR sit at its lowest levels this year.
The current standoff shows little sign of an improvement anytime soon, as Trump remains steadfast in his commitment to internalise US Manufacturing & Production. It seems as though he is prepared to continue down this road, regardless of any negative impact it may have on the global economy. The EU has responded in kind, instigating tariffs on alcohol and motorcycles but this seems to have had little impact on Trump’s current stance.
Moving forward and this escalating situation is likely to weigh heavily on investors and the Euros value could be negatively affected as a result.
Despite these on-going concerns, the EUR has still found plenty of support against GBP, which as discussed earlier in the report is facing an uphill struggle of its own.
Whilst the EUR has been unable to make any decisive move back towards 1.10, it is finding plenty of support around its current levels and looks unlikely to fall back below 1.15 in the short-term. Positive Services data yesterday is also likely to help to support it over the coming days.
Political fears in Italy and Spain have started to subside and the European Central Bank (ECB) remain optimistic, in regards to tying up their current monetary stimulus programme by the end of the year.
Of course, any escalation in the current trade standoff with the US could have an impact on their decision and as such, I would not be prepared to risk sitting back if I had an upcoming EUR currency exchange to execute.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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