Has the Euro got a weaker future


Has the Euro got a weaker future

Although the ECB will never tell you the truth behind their interest rate cuts, they would have surely taken the strength of the Euro against the dollar into consideration.

It is up to us as analysts to read between the lines and think about the bigger picture. Export in Europe is the basis of its trade, a high Euro means that the price to buyers becomes uncompetitive. You only have to look at the recent GDP numbers from Germany to realise that exports have already fallen.

So what is the answer?

Simple, well in theory anyway. The ECB loosens its belt on interest rates in the hope to bring the Euro down and increase export, in turn increase future GDP figures. The US has been talking about tapering for a while so this could cause strength in the Dollar. overall a weaker Euro and stronger Dollar will make the EUR/USD drop to recent lows.

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