If it were not for the debacle that is Brexit I think sterling could be making gains against the euro. The single currency could be in for a rough time.
The situation with Greece has seemingly been pushed under the carpet and Italy is now second in debt only to Greece and has now officially entered a recession.
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Germany is the engine room of the bloc and has only just narrowly avoided recession. There is also concern surrounding the increase in popularity of right wing parties in Germany and France. This has the potential to cause political uncertainty and in turn weaken the euro.
There is also the situation with US trade with some worrying threats made by Trump including a huge tariff on vehicles, which would no doubt hit Germany the hardest. Growth in the Eurozone is now at the lowest levels since 2014.
Let us also look at the situation with Quantitative Easing (QE). QE is an unconventional monetary policy in which a central bank purchases securities in order to lower interest rates and boost money supply. Its results around the globe have been mixed.
It will be interesting to see how the bloc copes without it. QE ended in the Eurozone in December. It was at one stage up to €80mil in monthly increments. The bloc will now have to contend with the problems above without the aid of QE.
Despite the current fragility of the pound I think later in the year we could see the pound make some impressive gains against the euro.
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