Germany is the EU’s economic powerhouse, so it’s a little surprising that the good news to come out of the bloc’s biggest member has not done much to excite the euro. Economic sentiment is continuing to disappoint, despite of largely compromised growth in Germany.
Moreover, the uncertainty around the trade deal between the US and China is back to haunt the markets, as the first phase of the deal has been heavily scrutinised by the markets. Doubts over the longevity of the trade deal are being questioned, and the weak outlook for Germany’s trade reliance with non-EU countries is beginning to drag on the euro.
UK Data Causes Sterling Growth
Across the English Channel, sterling is doing well which is taking analysts by surprise. Yesterday, November’s UK ILO unemployment data was published, which remained at 3.8%, with employment giving the UK economy a boost. This might be enough to limit the concerns around the possible interest rate cut from the Bank of England.
In other parts of Europe, we can expect France’s business climate numbers for January today, and if these numbers exceed expectations then they might boost the euro. However, what will really make an impact today will be December’s UK public sector net borrowing numbers. This could help sterling’s upward trajectory, giving it strength against its European and American competitors.
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