Last week was important for Eurozone economic data, with both Inflation and GDP figures for Q2 released on Wednesday.
The latest data saw the economy for the bloc experiencing a decline of 0.2% from the previous quarter. According to a Bloomberg report, the deteriorating economic prospects could increase the chances of further monetary stimulus from the European Central Bank (ECB) which has been largely encouraged by current president, Mario Draghi.
Inflation data for July also slowed to 1.1%, which was the lowest reading since early 2018 and moved the economy further away from the Central Bank’s 2.0% target.
It has since been announced by the European Commission, that sentiment for the Eurozone economy has deteriorated to 3-year lows and growing reports seem to suggest a trend resonating from some of the bloc’s largest economies; with slowing growth in France, Spain, Austria, Belgium and Italy.
This week does not provide any major economic data releases, however the latest Market Services PMI data releases this morning and German Production data on Wednesday, could attract investor attention and in turn influence short term sentiment in the currency.
It’s been widely reported that much of the economic pressures currently impacting the Eurozone have been linked to manufacturing and global trade tensions, that have most likely been influenced by the United States and the bloc’s largest economy Germany, has seen industry suffer as a result.
The German economy relies heavily on its exports and according to Destatis - the Federal Statistical Office of Germany, the country has experienced a drop in its production figures and in May alone factory orders saw the largest drop in a decade.
German export data registered a decline of 0.5% in April and several factors may have influenced this such as slowing growth from China, which has fuelled a drop in demand, in addition to the imposed US tariffs on steel and aluminium.
German Exports account for almost half of the country’s economic output and considering the nation is the 3rd largest exporter in the world after China and the United States, this could therefore influence sentiment in the single currency.
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