The Euro fell on Friday, reaching an almost three year-low due to the investors’ concerns about the slow economic growth in the Eurozone. The currency has lost 1% so far. There is a small chance of its rebound if the fourth-quarter gross domestic product data proves positive. However, economists expect 0.1% quarter-on-quarter growth, the same as the previous 3-month period. Such a result won’t be enough to boost Euro again.
The currency dropped down to $1.0827 overnight before settling at $1.0841. Meanwhile, the Swiss franc strengthened against the Euro at 1.060 francs. The analysts think that if the Euro deteriorates further, the Swiss currency may gain much more. The Franc’s increase comes at a time when its correlation with risky assets has broken down in the last weeks.
ING analysts stated that the bearish trend on EUR/USD might continue. It’s quite unlikely that growth data out of the eurozone will improve the grim economic outlook for the area. Furthermore, investors worry about coronavirus’s negative impacts on the eurozone economy. So even if the data proves to be better than expected, it may not be enough to trigger an inversion in the bearish EUR trend.
What about the dollar?
The dollar index is the measure of the currencies against a basket of rivals. It hit the highest record since October, rising by 0.4% this week – on top of gains of 1.3% last week. Traders are waiting for new U.S. data, which includes retail sales and industrial production numbers along with Eurozone data.
Meanwhile, Sterling consolidated gains around the $1.3060 mark after surging forward on Thursday. The new British finance minister’s announcement raised expectations that the upcoming budget would increase public spending. It will boost Britain’s economy after its withdrawal from the European Union. So far, the pound rose 0.1% to 82.995 pence against the Euro, close to a 2-month high.
COMMENTS