The Euro should increasingly find itself in the firing line as a series of pressures begin to mount on the single currency. These include the concerns over what is happening in France with the ‘gilets jaunes’ or yellow vest protest movement causing a series of riots and widespread anger across France. The government has now dropped the planned rise in fuel duty but the movement has turned into a greater discord in France at the government and how Macron is running the country.
The Euro might well find further murky territory ahead as the market begins to digest this news and raises concerns over the future direction of France, one of the Eurozone’s largest economies. Political concerns and uncertainty are a major source of contention within the Eurozone following the stepping back of Merkel and an increasing fear over a shift in the centre-left cohesion which has underpinned the growth forward in Eurozone politics in recent years.
Economic concerns are also present with the latest ECB, European Central Bank meeting scheduled for the 13th next week. There is an expectation that perhaps the ECB has been too bold in its predictions to halt the current QE, Quantitative Easing, plan. This could easily see the Euro weaken since part of the general strength of the Euro stems from the expectation that the ECB will forge ahead with plans to raise interest rates in the New Year.
Recent economic data has not been so strong and it is now very likely that we could see the ECB forced to backtrack, particularly considering the outstanding political concerns in the market surrounding France and also Italy. The Italian budget is still a bone of contention with the latest news from Italy being that the Italians might be willing to amend the budget to meet the EU expectations.
All in all, December is offering up some pretty major events to move Euro exchange rates. Clients with a position to buy or sell Euros might do well to take stock of the current events and also key issues driving their particular currency pair. For example on GBPEUR we have the latest new from the UK and the Brexit next week, and on the US Dollar Trade Wars and the US interest rate decision on the 19th could be a major factor in the market to consider.
For more information to assist in the timing and planning of a currency deal, to help you secure your currency at the optimum level and rate, please do contact myself Jonny on firstname.lastname@example.org.
Thank you for reading and I look forward to hearing from you.