The EUR has had a turbulent time of late, with the uncertainty surrounding Brexit hampering any decisive trends.
Only recently the EUR was on the back foot, when it seemed as though Brexit talks were finally progressing positively. However, not for the first time, talk of a positive conclusion to the ongoing saga was once again premature.
The Pound came under pressure last week, when UK Prime Minister Theresa May failed to convince her fellow MPs to back her Brexit deal. She also made a public address, in what can only be seen as a last-ditch attempt to try and save her much-maligned deal.
May’s speech was not well received, as she went on the attack, blaming Parliament for not backing her deal. It was a strange stance for the PM to take, considering she was relying on the same MPs she was pointing the finger of blame at, to then subsequently back her deal.
The markets did not take the developments positively, with the Pound dropping sharply as a result. This in turn helped boost the EUR value, with the single currency moving back towards 1.15 at its high.
However, just as it seemed as though the EUR was finding a level of support, market conditions once again changed. The EUR quickly lost the majority of its gains, falling back towards 1.17 against the Pound.
Whilst the Euro has found some support just under this threshold, the quick decline highlights the fragility of the single currency at present. It also indicates that the positive spike was a result of a drop in confidence in the Pound, which inadvertently boosted the EUR.
Euro forecast this week
Investors’ risk appetite for the single currency remains minimal, due to the recent downturn in key Eurozone economies.
Whilst the markets are likely to be focused on any developments with Brexit, the dovish outlook for the Eurozone economy may well continue to handicap any major advances for the single currency in the short term.
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