In today’s euro forecast, we look at what’s likely to affect the euro in the coming weeks. The outlook for the euro remains dovish, because there are concerns over the growth forecasts for the Eurozone.
Last week, the Eurozone saw its economic growth for 2019 revised down from 1.9% to 1.3%. What is possibly even more alarming is that Germany, the powerhouse of the Eurozone bloc, slashed its own growth forecast down to 1.1% from 1.8%.
Over recent years, Germany has always managed to keep its own economy relatively healthy, even in times of economic downturn. In turn, this helps to support other flagging economies in the EU.
If Germany shows signs of any longer-term economic downturn, then it is likely to reinforce the markets concerns about the Eurozone. Ultimately then, my euro forecast is that the euro may be in for a rough ride over the coming months.
Euro predictions: Euro may weaken as Italy enters recession
It is not just Germany that faces the prospect of economic contraction. Only recently, Italy has fallen back into a recession too. Italian Gross Domestic Product (GDP), which is the key barometer for any economy, is predicted to sit at just 0.2% in 2019. This makes grim reading.
With another Eurozone linchpin, France, in the midst of political crisis, it is easier to understand why investors have started shying away from the euro.
Indeed, those clients holding the single currency may wish to consider their positions. I fear they will see their assets depreciate over the course of 2019, if the economic strangleholds mentioned manifest themselves further.
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