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26 November 2018

Skepticism Grows Among European Forex Traders — Know Why

Slow growth, more regulations and an unfriendly international environment surrounds the Eurozone.

After worrying and unexpected signs of slow economic growth within the Eurozone, the Euro fell down 0.4 percent just at the start of this weekend. This according to a survey called Purchasing Managers Index (PMI), an informational piece that is known to be highly influential among forex traders.

Several sources also noted a slow pace in precise markets such as Germany, where its strong private sector is having its worst numbers since 2014. Some believe that all this phenomenon is caused by the omnipresent trade war led by the United States of America with other nations such as China, a giant so vital for global trade and international political affairs.

“The European Central Bank (ECB) might be forced to stick to an expansionary monetary policy.” Said Thu Lan Nguyen, executive at Commerzbank.

Fast Facts

  • Against the Swiss Franc, the Euro stands at 1.133 Francs, a 0.2 percent drop.
  • A 0.4 percent drop makes the Euro valuable at US$1.140.
  • Experts believe that the actual landscape of the Euro is getting more complex, many of them blame Italy’s fiscal problem.
  • The British Pound and the Norwegian crown were also traded down between 0.2 and 0.3 percent.
  • The United States Federal Reserve might increase its future interest rate.

The ECB’s principal task is to maintain a price stability within the Eurozone, that is why the international press is pretty sure that this monetary institution will make use of its €2.6 billion asset programme for December. With the advent of Brexit, trade wars and the global political turmoil we are living in, it was just a matter of time for the Euro to feel some shockwaves.

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