The Euro has been marginally weaker as we end 2018, on the back of fresh concerns over the economic outlook and the political direction for the area, going into 2019. The currency has been performing very well overall in 2018, benefiting from a belief in the market that the ECB, European Central Bank, will look to raise interest rates in 2019. The Euro could well come under pressure if this plan gets pushed back but the overall trajectory of the Eurozone economy and the Euro has been positive.
Political concerns stem from some of the issues being raised by France whose President Macron, has been facing the biggest crisis since being voted into office in 2017. The rejection of his style of government which promised to raise living standards for the many, has in fact, turned into promoting the interests of the few. An increasing tax burden and a rejection of the government has prompted a rise in anti-establishment sentiments.
France now joins Italy and others where the people are losing faith in the existing systems of government and considering alternatives. Such a viewpoint is not new in France, the French National Front party scored will in the 2017 elections, but failed to gain the Presidency. Those feelings have not disappeared and the recent news that France is looking at being able to hold Referendums should be a cause for concern on the direction of European politics in 2019.
The Euro is still at favourable levels against many currencies and this is presenting some good opportunities for clients looking to buy a foreign currency with the Euro in 2019. The next couple of weeks to the New Year may well see excessive volatility as the market has lower volumes and liquidity, which can see increased volatility as usual market movements are exaggerated.
2019 could prove a tough year for the Euro, for more information on the best strategy please contact me Jonny directly on firstname.lastname@example.org