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You are here: Home / Euro / Key economic releases could weaken the Euro this week

Key economic releases could weaken the Euro this week

July 28, 2016 by Rob Lloyd

Key economic releases could weaken the Euro this week
  • German Consumer price figures
  • Euro GDP released tomorrow
  • Banking stress tests could expose Italy’s banking crisis

euro consumer price figuresCurrent GBPEUR levels of 1.19 could be tested by the end of the trading week. German CPI figures released this afternoon could spell a negative downtrend for the Euro given the Brexit hangover and poor manufacturing output earlier this month.

Germany is the biggest net contributor to the EU ahead of France and the UK. The decision for the UK to leave the EU puts further strain on the remaining economies to perform, the release this afternoon will be scrutinised as investors gauge the mood of the economy post-Brexit.

Tomorrow’s GDP figures could cause volatility

Tomorrow’s GDP for the Eurozone could create a stir given the UK’s positive release yesterday. Prior to the referendum vote the UK outperformed expectations for growth despite looming Brexit fears. Tomorrow’s figures like the UK’s, provide insights into the mood of the economy prior to Brexit. However, if figures come out weak tomorrow concerns then begin to build for the next release which will include post-Brexit data.

Banking stress tests – how could they impact the Euro?

The banking stress tests on Friday afternoon will involve putting banks through scenarios to ensure they have funds available in the event people decide to pull their funds out. These tests could expose how vulnerable banks in Europe are and may require the ECB to take action independent of the Brexit outcome.

Given the issues with the Italian banks, I expect these tests to cause quite a stir which could strengthen GBPEUR exchange rates. Those looking to buy Euros with Sterling may want to do so ahead of the Bank of England’s interest rate decision. In the event an interest rate cut occurs, exchange rates could fall to the mid-teens.

Filed Under: Euro Tagged With: Eurozone economy, GBPEUR, Inflation

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About Rob Lloyd

Robert brings with him a wealth of knowledge on what is impacting exchange rates, especially around the subject of the EU Referendum and the implications for Sterling and Euro exchange rates.

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