Euro struggles against background of economic uncertainty
Euro/Dollar (EURUSD) fell today in the third straight day of losing ground against the US currency. This is not by any means disastrous, but it does seem slightly surprising given that you’d expect some positivity when looking at the Euro in the context of the unmitigated incompetence with which the UK Government has completely handled the implementation of the outcome of the 2016 referendum on the UK’s continued membership of the EU. In fact the Euro has barely managed to maintain stability even against Sterling (EURGBP), which must surely be uninvestible in the current climate. To a larger extent this lack of confidence in the Euro reflects the uncertainty surrounding prospects for European growth and the fear that one poor set of numbers will give impetus to the downside and start an avalanche. We are not quite that gloomy, but still do not see any pressing reason to think there is much in the way of good news on the horizon for the Euro, and if it cannot rally on positive news then alarm bells will start ringing in earnest.