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Weekly Roundup: Euro under pressure as EC forecasts deeper recession

currency-newsWeekly Roundup: Euro under pressure as EC forecasts deeper recession
The euro was left under pressure at the start of this week after comments from the European Commission stated the bloc is set to fall into a deeper recession than first forecast. This offset upbeat German data which showed a rebound in industrial production and increased factory orders.

The single currency was weighed down by the latest European Commission forecast which also revealed the bloc will take longer to rebound than previously thought. The biggest economies including France, Italy and Spain are some of the worst affected because of the coronavirus crisis.

Last week, the euro fell slightly lower after data showed underlying price pressures decreased in the bloc, although a weaker US dollar allowed EUR to make some gains.

The single currency remained under pressure mid-week as while the slowdown in Germany’s manufacturing sector contracted at a slower pace, the PMI remained in contraction territory.

However, in further signs of a recovery, unemployment in the Eurozone edged higher by only 0.1% to 7.4% but came in lower-than-forecast.

Looking ahead, the euro could continue to struggle following the release of further economic growth forecasts from the European Commission.

Although, the currency could receive some support if German data continues to boost confidence. If exports rebound in May, in a further sign the export-reliant economy is on track to recover, EUR will make gains.
 
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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