The Euro has been capturing some headlines recently owing to the worse than expected German Manufacturing data which was released this week, indicating Germany could be headed for a recession, this could easily drag the Eurozone into a recession too. Germany is the main economy in the EU, representing 21.3% of the economic output. Clients with a position buying or selling Euros should be very conscious that exchange rates could quickly take a fall if the economic data falters.
Whilst on the face of it, the worsening economic news is a cause for concern, there have been rising problems over car emissions which is the main trouble with the German Manufacturing data. Essentially news rules governing the testing of vehicles has been introduced and it has caused a large slowdown in economic activity, hence the lower figures.
This might prove that actually the economic data should not be read too much into, when assessing the future value of the Euro. Clients looking to buy or sell Euros in the future should be aware of the changing nature of the currency markets which might well see the currency experience volatility. Overall expectations are for the Euro to suffer in the future owing to political concerns from Italy and possibly France too, so far the Euro has proved rather resilient in defending itself against such concerns however.
Clients with a position buying or selling Euros should also be very aware of the potential for the upcoming economic news to move their exchange rates and should be making plans to mitigate the uncertainty. With some major global events like Brexit and Trade Wars continuing, investors will be moving funds according to the changes in economic sentiment.
The Euro will continue to be volatile as investors react to these events, if you are considering any Euro transactions then make sure you have highlighted your position to our team, in order for us to help with the best pricing and strategy.
Thank you for reading and I look forward to hearing how this progresses in the future.