EUR Forecast – Eurozone Economy Showing Signs of Fragility (Matthew Vassallo)

Euro Exchange Rate Forecast – The Week Ahead

It’s been a quiet day for EUR exchange rates, with both GBP/EUR & EUR/USD rates remaining fairly flat throughout Thursday’s trading.

The EUR has made some inroads against the Pound this week, despite a slowdown within the Eurozone economy, with GBP/EUR rates spiking from 1.15 close to 1.13 at today’s high.

The EUR had started to come under pressure of late, with the Eurozone economic growth expected to slow during the remainder of 2018. Eurozone inflation data today also made for grim reading, with the Eurozone economy seemingly slowing after months of prosperity.

With 2.5% growth predicted there initial concerns surfaced when early April figures showed only 1.2% growth across the Eurozone region. This negative feeling was intensified as the Eurozone’s economic powerhouse Germany produced output well below expectation at around 1% and the EUR lost value against a host of the major currencies as a result.

Whilst German housing data remains strong a dip in business confidence figures could also prove restrictive in terms any further spikes for the EUR in the short-term, although political concerns inside the UK government may help to offset this.

UK Prime Minister Theresa May has tried to quell rumours around a potential vote of no confidence, in relation to the UK’s future participation in the EU’s customs union. However, this has only stemmed any further losses for the time being, with the Pound under pressure ahead of next week’s Bank of England (BoE) interest rate decision

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