The Eurozone economy is currently growing at it’s weakest rate in over two years. This in contrast to a very positive 2017. Today's Euro report looks into the recent economic data pointing to this slow down, with the table below showing the range of exchnage rates available throughought the trading day on Friday of last week, highlighting the importance of timing your transfer well to maximise on your return.
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Eurostat data has suggested there has been a significant slowdown since 2017 and this could hit the UK economy as well. The UK is the Eurozone’s biggest trade partner so a drop-in growth is likely to hit the UK economy in turn as export demand falls.
Investors are concerned that if the trade wars intensify between the US and the rest of the world it could cause worry among businesses and cause fewer exports and a drop in foreign investment.
A European commission report last week showed investor confidence in the bloc fell to the lowest level in nearly twelve months in July, orders for exports and production expectations are declining.
The European Central Bank (ECB) has announced it will be ending Quantitative Easing (QE) in December. An extended period of weak growth however will put off chances of any rate hike from the ECB in 2019.
ECB president, Mario Draghi spoke recently and said the bank’s governing council are confident that inflation was still heading for the 2% target which could move interest rate levels away from zero.
Contradictory to this however is the belief that the recent rise in inflation is down to the recent raise in energy prices.
So, things are not all rosy in the Eurozone, but I am afraid the uncertainty surrounding Brexit outweighs the drop off in Eurozone growth. Be wary of hoping for substantial gains for Sterling based on this.
There is little data of consequence released this week from the Eurozone. The pick of the bunch would German Trade Balance data released tomorrow. This displays the balance of imports and exports of total goods and services. Germany is considered the engine room of the bloc and so can influence the market. There is predicted to be a slight fall, if the data lands away from predictions however expect volatility.
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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