The value of the Euro has been under threat recently and has been falling against both the Pound and the Dollar. EUR GBP levels are now near a two-month low and against the Dollar at a three-week low. The reason for the fall in the Euro's value has generally been from worrying signs of the economy across the block. Germany, seen as the power engine for Europe, reported growth slowing to 1.5% in 2018, its weakest pace since 2013. The worry in Germany was further confirmed yesterday with the released of the ZEW survey which is a biases confidence survey which showed a small drop lower.

 

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR3.7%€8,600
ECB meeting expected to have a negative tone

ECB meeting expected to have a negative tone

Next on the horizon for Europe is the European Central Bank meeting taking place tomorrow. As Europe's growth slows down there are thoughts that the bank may well re-visit their non-conventional QE program. This was a program it started following debt programs across a number of member states including Greece, Italy, Portugal and Spain. When regions on Europe started to pick up, mainly Germany in 2016 and 2017 the bank started to slow down the rate of QE which came to an end in December. Personally I don’t think that they will re-start this program and think it far more likely that they will push back expectations on when an interest rate hike may come from the summer to the end of the year or maybe even next.

Added to the future being unknown with regards to policy, the current head of the bank, Mario Draghi non-renewable term ends in October and there seems no obvious replacement. The tone from this meeting most expect to be negative and as a result could well make the euro cheaper to buy as we end the week.

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