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Could euro extend losses on Eurozone growth data?

business-articlesCould euro extend losses on Eurozone growth data?
  • Weaker Eurozone growth to extend euro losses

  • Slowdown in Canadian GDP to dent Canadian dollar

  • US dollar looks for support on personal consumption expenditure data

 
 

Euro under pressure ahead of Eurozone growth data

 
After Germany’s disappointing inflation data the euro may struggle to return to a stronger footing today.
 
Forecasts point towards the Eurozone losing further growth momentum in the final quarter of 2018, exposing the single currency to fresh downside pressure.
 
Confirmation that the Eurozone economy has continued to slow would give investors incentive to sell out of the single currency, especially if Italian growth data also proves underwhelming.
 
With the European Central Bank (ECB) already taking a cautious view on the economic outlook any slowdown is likely to diminish the odds of interest rates rising in the months ahead.
 
 

Easing Canadian growth set to weigh on CAD

 
The appeal of the Canadian dollar looks set to diminish this afternoon with the release of November’s gross domestic product figures.
 
Investors expect to see growth ease markedly on the year, accompanied by a contraction in GDP on the month.
 
Evidence of a slowing Canadian economy could dampen the mood towards the Canadian dollar, even though the fourth quarter may still see a solid overall growth performance.
 
In the absence of any uptick in growth CAD exchange rates look set to trend lower across the board.
 
 

Steady personal consumption expenditure to support US dollar

 
USD exchange rates could find support on the back of December’s personal consumption expenditure data today.
 
Signs that inflationary pressure in the US economy remains solid, with a steady year-on-year PCE core reading of 1.9%, may improve the case for greater Federal Reserve hawkishness.
 
On the other hand, if the index falls short of forecast the mood towards the US dollar could easily deteriorate.
 
Worries over trade relations between the US and China may also put pressure on USD exchange rates over the course of the day.
 
 

Upcoming Data:

 
Thursday, 31st January 2019
10:00 EUR Eurozone Gross Domestic Product
13:30 CAD Gross Domestic Product
13:30 USD Personal Consumption Expenditure Core

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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