07.02.2019: EUR recovery is unlikely (EUR/USD, GBP/USD)
Today the euro keeps moving lower, approaching last year’s levels.
The US dollar is rising across the board, and there is no important macroeconomic news that could support the single European currency. So, these factors favor bears on the EUR/USD pair. Its quotes are approaching the two-week low, trading near the level of 1.1320.
The monthly economic outlook provided by the European Central Bank also put the euro under pressure, so it lacks momentum to resist its American counterpart. Bearing in mind the current economic and political instability in the region, the ECB interest rate is likely to remain at the zero level for long time. Besides, the bank’s analysts noted a slowdown in the global economy which reinforces downward risks for Europe.
Brexit is another negative factor. Most experts anticipate that this procedure will entail problems. Theresa May will hardly manage to agree on adjustments to the exit plan with the EU officials. European Council President Donald Tusk has gone as far as speaking about a special place in hell for those who promoted Brexit without a plan.
The British pound continues falling against the US dollar. The chart retreated from the level of 1.2900 and approached the two-week low, just as the euro did.
The results of the Bank of England monetary policy meeting and consequent experts’ forecasts are quite predictable. Risks of a slowdown in the global economy and uncertainty over Brexit are unlikely to have a positive impact on the UK economy.
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