Forecast: BULLISH

The European Central Bank is expected to completely withdraw from its quantitive easing bond purchasing programme in September. The EUR has been strong throughout 2017 due to economic data confirming the central bank’s quantitative easing programme pushed inflation back towards their 2% target and has also improved unemployment. The unemployment rate has fallen throughout the year and GDP Growth has been very good.

As long as there continues to be strong data released, we can expect the EUR to continue to increase against other currencies.  The ECB has tried to downplay the timing of the next rate hike by suggesting interest rates will be kept at 0.00% for an extended amount of time of September withdrawal from QE. However this communication is likely to be so the markets do not wildly push the EUR higher in 2018 and cause its rapid appreciation in the exchange rate to cause export prices to become too expensive, resulting in a drop of income coming into Europe as fewer goods and services are sold internationally, something the ECB doesn’t want as it can effect inflation reaching the banks 2% target.

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