Tough Times Forecast for Euro (currency : EUR)

November 24, 2015 - Written by Ben Hughes

STORY LINK Tough Times Forecast for Euro (currency : EUR)

GBP/EUR Conversion Rate Briefly Touched 1.41 in Early Trading

The euro (currency : EUR) has opened up today’s session in bright form.

The shared currency has posted sustained gains against the Pound Sterling (currency : GBP), with the GBP EUR exchange rate briefly dropping into the 1.4100s during early trading in the global currency markets.

The pair had briefly broken back above the 1.4300 threshold yesterday and looked like it might have the legs to make a run at a fresh 7 ½ year high following a dire warning regarding the future prospects of the euroland economy from a widely-respected think tank.

IPPR Predict the Eurozone will Enter Recession on Widespread Unemployment

The Institute for Public Policy Research (IPPR), a UK-based organisation which is considered to lean mildly to the left of the political spectrum, issued a report advising investors that current widespread joblessness across mainland Europe threatens to become entrenched – a development which would effectively plunge the eurozone economy into permanent recession.

The IPPR asserted that unemployment was not the only threat to the way of life of European economic participants – the missive estimated that the current rate of underemployment in the euro area sits at 5%, representing another drain on the region’s resources.

The think tank described these numbers as ‘deeply alarming’.

European Data Supports Demand for the Euro in the Short-Term

On the data front, the economic numbers out of the eurozone yesterday proved to be generally helpful to the single currency.

The latest Purchasing Managers Index survey of Germany’s services sector pointed to a higher than expected rate of growth at 55.6, while the whole of eurozone version of the figure also bettered analysts’ expectations.

Meanwhile, this morning’s euroland data was generally less encouraging in tone; although the finalised version of Germany’s Gross Domestic Product data printed bang-on expectations, a below-par showing from the latest German export data and a negative Q3 German Capital Investment number provided further evidence that all is not well with the euroland’s number one economy.

Analysts forecast that, for this reason, the near-term future may not be bright for the euro.

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TAGS: Euro Forecasts Euro Pound Forecasts Pound Euro Forecasts