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Growing risk of German recession dents euro

business-articlesGrowing risk of German recession dents euro
  • German manufacturing slump weighs on euro
  • Pound under pressure ahead of industrial trends index
  • New Zealand dollar braces for latest RBNZ meeting
 
 
Euro vulnerable to fresh signs of German economic weakness
 
September’s raft of Eurozone manufacturing and services PMIs failed to offer the euro any cause for confidence yesterday.
 
As the German manufacturing sector saw another sharp decline in monthly output fears that a technical recession is on the cards increased, dragging down the single currency.
 
However, EUR exchange rates could find a rallying point this morning if the latest IFO business sentiment survey shows an improvement.
 
 
Industrial trends decline forecast to drag on pound
 
After a muted start to the week GBP exchange rates could face further downside pressure this morning.
 
Forecasts point towards September’s CBI industrial trends orders index weakening from -13 to -18, highlighting a continued decline within the sector.
 
Unless the UK economy can demonstrate greater signs of resilience in the face of ongoing Brexit-based uncertainty GBP exchange rates look set to remain on the back foot.
 
 
New Zealand dollar set to slide ahead of RBNZ meeting
 
Support for the New Zealand dollar is likely to weaken over the course of the day as markets brace for tomorrow’s Reserve Bank of New Zealand (RBNZ) policy announcement.
 
Although no change in interest rates is expected at this stage investors remain wary of the prospect of another dovish signal from policymakers.
 
NZD exchange rates could come under additional pressure if tonight’s trade data shows a widening of August’s trade deficit.
 
Another signal of weakening economic strength could see the New Zealand dollar trending lower across the board.
 
 
Upcoming Data:
 
Tuesday, September 24th 2019
09:00 EUR German IFO Business Climate Index
11:00 GBP CBI Industrial Trends Orders
11:45 NZD Balance of Trade
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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