Euro forecast: Will the Euro weaken further in February?

Here’s our latest Euro forecast for when it’s the best time to buy Euros. The Euro looks likely to remain under pressure in February. This is because there is a major shift in economic sentiment concerning the Euro.

A good example of the shift in sentiment relates to the confirmation last week that Italy is now in a recession. This is not great news for the Eurozone. The whole idea of the ECB, European Central Bank’s, economic policy had been to stave off such issues. For Italy to be back in recession, the third time in a decade, is very worrying.

As early as last year investors were bracing for this kind of news, with the markets very troubled by the recent turns of events we have seen. Clients with a position buying or selling Euros are now faced with a number of challenges to try to mitigate the future uncertainties. Important economic data will include inflation. Previously, low inflation was a trigger for the ECB to embark on a QE, Quantitative Easing, plan which saw the currency lose lots of value.

Best time to buy euros in 2019

2019 is a pivotal year for the Euro. This is because the market will digest the economic output for the Eurozone and match this against the expectations placed on it by the ECB. Clients with a position buying or selling the Euro will need to monitor these developments to establish the extent to which the economic reality matches the previous expectations. If the Eurozone weakens, the euro may fall, making it a favourable time to buy Euros.

Buying Euros? European elections important

For your Euro forecast, important developments ahead are the European elections and also the finality of the QE program, confirmed in December. It might be that the previous expectations for the ECB to consider raising interest rates in 2019, get pushed further back. This could see the Euro lose ground, in turn benefiting you when you buy Euros.

The Euro has performed well in recent years despite a number of economic and political challenges. The outlook ahead is most uncertain and I foresee a great chance of some of the uncertainties spilling over.

If you intend to buy Euros or sell Euros and wish to be kept abreast of the latest Euro forecast, please do not hesitate to get in touch for us to discuss the market and all of your options. I’ll be delighted to help.

Jonathan Watson