The euro has received a fresh boost today. A report issued yesterday by Danske Bank had revised predictions for the Euro following a ‘perfect set of conditions’, both political and economic that have allowed the Euro to go from strength to strength, what is more is that the report has identified further strength for the Euro in the months to come.
Euro makes strides against GBP and USD
The Euro has recently made massive strides against the GBP and the USD. The UK’s current economic situation following a downgraded growth report from the IMF this week and worse than expected GDP figures today have done little to inspire investor confidence in the Pound. As a result, I think it will be matter of time before the GBP/EUR rate drops below 1.10.
The Euro has recently surged against the USD too. The US Dollar is facing its own struggles at the moment. The controversy caused by the ongoing investigation into possible collusion between Trump and the Kremlin at the time of the Presidential campaign. This has been the main driver for the USD weakness, however the Euro shouldn’t be underplayed. Downside risks to the Euro have seemingly disappeared. As all eyes turn to the German elections in September, it is now anticipated that the German Prime Minister Angela Merkel will come out unscathed. Recent events in the French elections seem to have put the anti-establishment feel in the Eurozone out for now.
What’s next for the Euro?
The question now is can the Euro sustain such growth and will the Euro bite back at some point? Credit Suisse have brought an interesting point to the table, the recent rally in the Euro’s strength will impact on Eurozone exporters’ profits, with firms such as Volkswagen and other automakers likely to be heavily impacted.