Euro set to strengthen going into 2020

GBPEUR: UK and Europe Get a Growth Boost

Analysts have stated that the euro is set to strengthen in the next quarter. Going into a new year can be daunting for any currency as it enters a new period of possibilities.
However, analysts at CIBC have pointed out that the global economic sentiment is improving, and the chances of economic stabilisation should be enough to see the euro prosper going into 2020.

Strong Start to the New Year Predicted for the EUR

Analysts at the CIBC have stated that the EUR is in good positioning to benefit from the proposed pick-up in global sentiment and economic stabilisation. They also gave an insight into what the EUR might look like up against the USD going into Q1 and Q2, with a returning value of 1.12 and 1.14 respectively.

The analysts are suggesting that “the stars are starting to align for EUR bulls”, but they have taken note that the monetary policy is still quite loose.

On the other hand, manufacturing sentiment is beginning to recover, especially in Germany after two sluggish quarters of growth. This inspires positivity for the EUR outlook and it appears that the setbacks from the latter end of this year are starting to be on the road to recovery.

Global Trade Front Outlook Looks to Pick Up, Which Could Help the EUR

On the global trade front, the sentiment is improving and this is good news for the euro. The Trump Administration has also extended the final decision about auto tariffs into May 2020, further bolstering the positive swing of momentum.

Added to this, a Conservative sweep in the UK general election should ensure that the withdrawal agreement should finally be passed before the January 31st deadline, which will open up the floor for the trade talks to begin between the UK and the EU.

President of the ECB Highlights Eurozone Stabilisation

The president of the European Central Bank, Christine Lagarde gave further support for the euro as optimism was spread surrounding the domestic picture for the EUR. In her first speech she pointed out that stabilisation in the Eurozone economy is evident and that there were signs of increase in underlying prices.

However, the optimism will only push so far as the ECB is still a long way from paring back its large stimulus program, especially as the bank will only begin to review the strategy next month.
However, with the USD currently facing pressures, notably President Trump’s impeachment complexities, the EUR’s topside against the dollar looks more attractive and this will hopefully bring about positive change to the outlook of the euro.

If you would like to learn more about what may affect the GBP/EUR or have an upcoming currency transfer, please contact me, Tom Holian, using the form below.