German business confidence rebounded to a 2-year high in the month of September, according to an index released by the IFO. President Clemens Fuest is expecting the economy to have a “Golden Autumn” which if true, could shed some light on how German economic releases could sway this week. The German Government has raised its growth forecasts from 1.6% to 1.7% this month, with some German economic institutes forecasting growth of 1.9% for the remainder of the year.
The German economy appears to be shrugging off the Brexit vote, and if predictions are correct strong German manufacturing figures this morning should present themselves.
If there’s one point of contention, whilst the German economy remains on a solid footing other areas within the Eurozone do not share the same optimism. Greece is yet again in the headlines when the Greek PM warned creditors on Friday that a failure to extend a debt restructure would push the country into a perpetual spiral of bailouts.
Mario Draghi made comments following the interest rate decision on Thursday that spooked markets, causing the Euro to fall to 4-month lows against the US Dollar. Similar affects were noted against Pound Sterling but to a much lesser degree. With the ECB’s current QE programme set to expire in March markets are now convinced following Mr Draghi’s remarks, that they plan to extend the programme beyond its March expiry.
His speech at 16:30 on Tuesday will be watched with scrutiny as many await further clues, potentially resulting in further weakness for the Euro.
Beyond economic data this week, those with a Euro buying or selling requirement should continue to pay particular attention to Brexit related news. Sterling rallied against the Euro on Friday following Theresa May’s positive comments at the EU summit. And as witnessed when European leaders and Parliament discuss the topic exchange rates tend to sway in either direction.
Alternatively, why not speak to our knowledgeable team today on 01494 725 353 to get all the Brexit news that could impact your currency requirement.
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