Analyzing the Euro's Forecast Amidst Eurozone Data and Global Factors
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As the Eurozone grapples with the latest economic data, investors and market participants are keen to understand the forecast for the Euro (EUR). We engage in a conversation with Santa Zvaigzne-Sproge, CFA, to gain insights into the potential implications of recent developments on the Euro's performance.
The manufacturing and services Purchasing Managers' Index (PMI) in the Euro area has shown signs of decline, introducing downward pressure on the common currency. This suggests a potential deterioration in economic health and raises concerns about the onset of a recession. These factors may impact the valuation of the Euro against other major currencies.
FXMAG.COM:
In light of the latest data from the Eurozone, what forecast can you make for the EUR?
Santa Zvaigzne-Sproge, CFA:
Lowering manufacturing and services PMI in the Euro area might contribute to downward pressure on the common currency as they indicate a potential deterioration of economic health and a potential recession.
However, the Euro value may be more dependent on the ECB's decisions on further interest rate hikes and the value of the US Dollar. During recent uncertainties in the financial markets, the US Dollar has been slightly regaining strength due to its “safe haven” asset features.
Furthermore, the FED is expected to raise key interest rates in their July meeting potentially giving additional strength to the US Dollar. Meanwhile, continued deterioration of macroeconomic data in the Euro area may push the ECB to halt raising interest rates resulting in a weakening Euro.
