It was another below par day for Eurozone data yesterday as the latest Manufacturing PMI data missed expectations. This followed Gross Domestic Product missing expectations the day before as Eurozone growth just stayed above 2.0%. Todays Euro report discusses the weaker economic data released recently, reducing the likelihood of futher interest rate hikes in the bloc. The table below shows the difference in return you could have achieved in return when sending £200,000.00 to Euros.
|Currency Pair||% Change||Difference on £200,000|
Today is a quiet day for data in the Eurozone however that cannot not be said for tomorrow. The Services Purchasing Managers Index will be released first thing in the morning with the results for July expected to be the same as June.
European data of late has been weak which has led to the markets reiterating the point that an interest rate hike in the Bloc will not happen till 2019, which puts the EU somewhat behind the US.
The emergence of a divide between the north and the south countries from an economic perspective, along with immigration has created uncertain times within the European Union with the effect taking its toll on the Euro’s prospects.
At this point considering the Eurozone economy in general is arguably treading water the Euro is holding firm. Against Sterling it might seem that the Euro is on the charge however most of the downward movement in the last year has been from negative Sterling news.
One of the main concerns the Euro does face is trade with the US, the attractiveness of investing in the EU comes down to how lucrative the economy becomes.
If talks with the US breakdown and more tariffs are introduced the single currency could find itself losing value. Against the US Dollar we have already seen 10 month lows recently and with more economic tightening expected from the FED in the near future new lows may not be far away.
In retaliation to the latest trade wars European and Asian leaders have decided to meet in October to plot a response to Donald Trump’s tariffs. They have come to the conclusion that an attack in numbers could help them to achieve a better outcome than fighting on individual fronts.
On the 18th & 19th October fifty-one European and Asian countries will meet in Brussels to discuss the situation, if there was a resolve to the matter then the Euro could receive some positive momentum. If you’re looking to exchange Euro’s in the near future make sure you’re in contact with your broker especially as so much could change in a short space of time.
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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