Recent business sentiment reports for Germany, France and Italy point to a slowdown in economic output in the Eurozone, this market report looks at the potential impact of this, and other political factors on the horizon, on the Euro. The table below shows the difference in Euros you could have achieved when buying £200,000.00 during the high and low points of the past week.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.62%€4460

Weak business morale – is this the beginning of the slowdown?

The Eurozone economy has endured a sluggish start to the year so far and weak business sentiment reports from Germany, France and Italy, effectively the driving force behind the Eurozone, all pointed to a slowdown in economic output, effectively signalling that growth within the Eurozone may have reached its capacity.

The Eurozone economy’s growth was in fact one of the best of last year, however a strong Euro mixed with fears over a trade War between China and the United States have all contributed to a slowdown, according to the latest survey released yesterday.

The biggest concern yesterday was that the German IFO report fell for the fifth consecutive month in April to the lowest level in almost a year. As the engine behind the Eurozone, a drop off in this economy can often result in Euro weakness.

What will impact the Euro for the rest of the week?

Italian Politics Update – Potential Breakthrough in Coalition Talks

Italy’s centre left Democratic Party or PD said yesterday that it would be willing to open collation talks with the anti-establishment 5 stay party if the party breaks its alignment with the centre right party. 

So far the seven weeks of stalemate has resulted in business confidence stalling, and was sighted on the business reports covered in my previous section as the main reason for the lack of business confidence in yesterday’s surveys. This leads me to believe that any breakthrough in these talks is likely to feed through into Euro strength, although I wouldn’t be holding my breath for a quick turnaround.

French President Emmanuel Macron visits the White House and President Trump

Away from regular economic and political news, the French President Emmanuel Macron met with President Donald Trump. As the deadline for the Iran deal looms, reports have suggested that Macron has been sent to the White House in order to sway Trump to avoid any rash decisions.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.