Storms ahead for the Euro?

Euro volatility is likely in the coming weeks, recent data shows EU growth is currently at its slowest pace since 2014. Italy has just entered a recession and the beating heart of the Eurozone’s economy, Germany has just barely avoided recession.

The situation in Spain is also being monitored closely by the markets. The trial of 12 Catalan separatists has begun. They are in court following an independence bid that was deemed to be illegal in 2017 for Catalan independence.

The Spanish government is playing a dangerous game in persuing the trial. They risk pushing away Catalan separatist parties that have supported the government in a coalition. This has the potential to cause an early election which could be as soon as April.

There is also a worrying situation in France. There is rising popularity in France for the “yellow jacket movement” which is combining with a drop in popularity for President Macron. The elections in May could prove interesting and will no doubt create volatility on the exchange.

Looming like a dark shadow across Europe from across the pond there is also the ongoing trade war with the US. The Trump administration is threatening an increase of 25% in tariffs on cars. This would hit the Eurozone hard, particularly Germany.

Quantitative Easing (QE) which is essentially pumping money into an economy to stimulate growth has recently come to a end. Huge amounts of money in excess of eighty million euros a month were being injected into the european economy a month. With QE now cut to zero it will be interesting to see how the Eurozone copes.

Unfortunately the lack of clarity surrounding Brexit is still outweighing the Eurozone’s troubles. The next key date on Brexit talks is the 26th February where Prime minister May is due to put forward her new proposal for Brexit hopefully with concessions from Brussels. This hope seems to be fleeting however as the European Union has consistently stated no further changes will be made to the deal. The Pound Sterling could face further losses short term if this trend continues.

All in all the currency markets are in for a rough time in the coming months. Here at CurrencyDeals4U we aim to make your holiday planning just that little bit less stressful. So contact us today for great rates on may different currencies that are hard to beat.

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