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Euro Pressured by ECB Speculation and Growth Concerns

Last week’s high: €1.1166

Last week’s low:  €1.1103

Euro (EUR) Flat as German Recession Looks ‘Unavoidable’

The single currency remained under pressure at the start of the week as investor morale in the bloc’s largest economy plunged to the lowest level in close to a decade.

Sentix Director Patrick Hussy noted ‘a recession looks unavoidable’.

Meanwhile, the GBP/EUR exchange rate was left muted as UK GDP revealed the UK economy had expanded by 0.3% in May.

Euro sentiment slipped as the European Commission lowered its growth and inflation estimates on Wednesday, stating that US trade policy posed a large risk to the Eurozone.

On Thursday, German inflation edged closer to the European Central Bank’s (ECB) target as annual inflation rose by 1.5% in June, but Friday’s German industrial production report disappointed.

EUR Outlook: Disappointing German Economic Sentiment to Weigh on the Euro?

Looking ahead to Tuesday, the Euro could slide against the Pound following the release of the two German ZEW sentiment surveys if they show a decline in confidence.

The Euro could then extend losses on Wednesday if the Eurozone’s Consumer Price Index (CPI) does not rise as forecast.

Germany’s Producer Price Index (PPI) will also be of interest.

Key Events

16th July

09:30   GBP ILO Unemployment Rate (May)

09:30   GBP Average Earnings (3Mo/Yr) (May)

10:00   EUR German ZEW Survey – Economic Sentiment (July)

10:00   EUR German ZEW Survey – Current Situation (July)

10:00   EUR ZEW Survey – Economic Sentiment (July)

17th July

09:30   GBP Retail Price Index (June)

09:30   GBP Producer Price Index (June)

09:30   GBP Consumer Price Index (June)

10:00   EUR Consumer Price Index (June)

18th July

09:30   GBP Retail Sales (June)

19th July

07:00   EUR German Producer Price Index (June)


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To keep up to date with the Euro, visit the EUR blog in our Currency News section.

Alastair Archbold
Foreign Exchange Manager

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