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Weekly Roundup: Heavy German growth slowdown drags on euro

currency-newsWeekly Roundup: Heavy German growth slowdown drags on euro
The latest signs of slowness from the German economy weighed heavily on the euro, with markets still wary of the prospect of a fourth quarter growth contraction.

As the German gross domestic product slowed to just 0.6%, hitting its lowest level of growth since 2013, this put EUR exchange rates on the back foot.

With the Eurozone’s powerhouse economy still appearing at risk of slipping into a state of negative growth investors saw little reason to favour the single currency.

Even though the latest Eurozone consumer price index confirmed a modest uptick in inflationary pressure this failed to give the euro much of a boost ahead of the weekend.

The mood towards the euro could improve on Thursday, however, if the European Central Bank (ECB) signals greater signs of confidence at its policy announcement.

While no change in monetary policy is expected at this stage EUR exchange rates could still find a rallying point if policymakers express less dovish sentiments.

Even so, if January delivers another raft of underwhelming Eurozone manufacturing and services PMIs the single currency could fall further out of favour.
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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