The euro has been feeling the pressure since the turn of the year as economic data in the Bloc appears to be showing signs of a slowdown.
Yesterday morning the Eurozone provided further evidence of this with lower than expected manufacturing data for Germany. PMI data came out at just 47.6 and anything below 50 shows a contraction which is the lowest level in over 6 years.
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Eurozone PMI also showed a slowdown which was the slowest since 2013 and this caused the euro to weaken.
We could see further movements for the euro with the release of Eurozone inflation data in the form of the Consumer Price Index due out at 10:00 this morning. Inflation is due to come out at 1.1% which is lower than the target level of 2%.
With Eurozone inflation remaining low this means that the European Central Bank will continue to keep monetary policy at the same levels, which could result in some euro weakness.
Germany has been experiencing their slowest growth levels in over 6 years. Donald Trump is currently considering whether or not to change tariffs on European cars, if this takes place this could cause a big problem for the German car industry and potentially cause problems across the Eurozone as a whole.
In Spain things are very unsettled politically as an election has been called for 28th April with 350 seats in the Congress of Deputies up for election.
The far-right Vox party appears to be gaining some support and in a number of polls many people expect them to win a number of seats. Far right parties across Europe appear to be gaining further support over the last few years as voters appear to be looking for a change to the status quo. This is a concerning trend that could impact upon the euro.
In Italy, the Economy Minister Giovanni Tria has suggested that it is too early to decide whether or not to change the current Budget. Italy is currently in recession and growth is predicted to come out at just 0.2% compared the expectation of 1.2%.
With such problems in Europe then Brexit aside the pound could improve against the euro if the problems continue to struggle on the continent.
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