There is some hope for the Euro buyers at present in form of the ongoing trade war between Europe and the US. The US report below looks into the ways international trade wars have impacted the single currency already and how this could continue if the trade ware were to escelate. The table below shows the potential difference in return you could have received when selling £200,000.00 during trading hours on Wednesday, depending on the exchange rate at the time.
|Currency Pair||% Change||Difference on £200,000|
Currently the US has imposed tariffs on Steel and Aluminium of 10% on aluminium and 25% on steel.
Europe then retaliated with $3.4bn tariffs on a variety of goods such as whiskey, Harley Davidson motor cycles and Levi’s jeans.
The problem is this has the potential to escalate the problem. Trump has threatened to up the ante by imposing a 20% tariff on cars which would hit a key source of income for the Eurozone, the German auto industry. This does have the potential to cause Euro weakness.
Trump has already increased tariffs against China which is weakening investor confidence in general due to global economic uncertainty. European markets fell as a result. The FTSE 100 fell by over 100 points during yesterday’s trading.
If you have requirement involving the Euro keep a close eye on developments as the unfold. I would suggest letting your broker know if you have a requirement so they can keep you up to date with any market movement.
Today we will see the release of French and German Consumer Price Index (CPI) data. CPI is a measure of inflation and this will be kept an eye on by investors as this has been the stumbling block for a rate hike for the European Central Bank (ECB) for some time. An increase in inflation brings a rate hike closer to fruition so it could cause a spike in Euro value. Germany is the engine room for the Eurozone economy so this will have more influence than the French release.
The ECB Monetary Accounts also takes place today. It gives an overview of the economic situation in the Eurozone and provides rationale behind current monetary policy. There could be hints given away as to monetary policy moving forward which can cause movement in the market.
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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