This Euro currency forecast discusses factors that could affect EUR exchange rates.

Euro Central Policy controversy

The European Central bank meets in the first week of June. This meeting has attracted more focus from traders as the political arguments with the European Central Bank (ECB) have become more public. It was only this week that one of the senior members offered a very public and scathing view of the policy implemented by the ECB recently. Suggesting that the QE program is not working, the investment of the QE program is perhaps not correctly distributed across all member states, and the long timeframe of low and dropping interest rates potentially hurting the larger economies including Germany and France.

This negative tone had an equal negative impact on the value of the Euro and resulted in losses earlier this week. As we get closer to this event updates and commentary are again likely to have a similar impact on the value of buying or selling the Euro.

The European Meeting Accounts are released this afternoon and could easily have an impact on the Euros value. They do normally use this as a sales opportunity as it is beneficial to promote the commodity that they are selling; as a result expect the Euro to get more expensive probably in this afternoons trading session.

Greece update

Greece has not really been taking centre stage in the UK media as the EU referendum sells more papers, it is still being widely talked about across trade floors in the city. Even though the amount of refugees flocking to Greece has dropped significantly since the deal with Turkey was signed earlier this year, their financial situation is still stalling.

Regular traders will be well aware of the impact of Greece on the markets in recent years and that could well return. Their next bail-out payment is due at the end of June and they are already suggesting that they cannot pay. It seems that the European community keep adding more bad debt and achievable repayment scheduled on the failing state. To such a point that the International Monetary Fund (IMF) has suggested that they want Greece off the bailout loan hook until 2040. If this is confirmed I expect the Euro to strengthen however this deal seems a long way off.

Anyone with Euros to buy will be wanting more bad news for Greece as this will weaken the Euro making it cheaper to buy. Personally I think this unlikely.

Thank you for reading my Euro rate forecast, if you have any questions about Euro exchange rates I would be more than happy to discuss them – please email any queries to hse@currencies.co.uk.

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