Euro Q4 Fundamental Forecast: More Euro Weakness Likely Lies Ahead

The Euro Q4 Fundamental Forecast shows that there is more downside than upside in the market, which could imply that the third quarter will be quite weak. This will mean that Europe’s growth rate will probably remain very subdued, and it might even pick up a bit from the start of the quarter. The European Central Bank may consider steps to stimulate the economy through the release of more liquidity to the banking sector, but we think that any such move will be counter-productive.
The Euro Q4 Technical Forecast indicates that the European economy will grow by only about three percent in the third quarter, compared to the expectation of two percent. This is quite poor, as there are few indicators suggesting that there will be a rate of growth that high. It means that investors will probably move on the safe side and buy more bonds until the fourth quarter of this year. Should the outlook for the third quarter turn out to be negative, then we would not expect bond prices to move much in the near future.
The Euro Q4 Fundamental Forecast indicates that the Euro will probably remain very weak against the dollar due to ongoing political problems in Spain and Portugal. If Portugal opts for bankruptcy and Spain continues to struggle with economic indiscipline, then the Commission will probably step in to bail out these two countries. Spain has the highest per capita debt of all the peripheral European countries. Should the Commission decide to interfere in the financial system of Europe, the effect on the British pound will be severe.
In this quarter the Euro will be able to support its position as the weaker economy of Portugal will start to emerge from its recession. If the situation in Spain worsens then the Euro will probably weaken versus the dollar. The third quarter’s data will confirm the above prognostications. It is expected that after the fourth quarter, the Euro will be struggling against the dollar.
European inflation is expected to remain negative, with the exception of very rare occasions. This can only occur if the economic data released by the European Central Bank indicates an uptrend. The European Central Bank (ECB) cut interest rates in July and has increased stimulus package for banks over the last several months. However, analysts believe that inflation will remain weak for the time being. Should economic indicators start to improve, then European inflation should pick up.
The Euro has already lost ground against the dollar over the last few years and is currently trading at a level that may continue to lose value. The euro has already lost ground against the dollar over the last several months and is currently trading at a level that may continue to lose value. Should economic indicators start to improve, then the euro should pick up versus the dollar. This analysis does not consider the possibility of the Bank of Europe lowering interest rates further. Economic indicators are usually the best guides for predicting where the European economy is going. Although the forecasts are not perfect, they are usually accurate enough to give you a general idea of where the European economy is headed.
The economic data will continue to suggest that the European economy contracted slightly in the third quarter of 2012, following an increase in gross domestic product (GDP). The recent interest rate cuts in the United States and Canada were followed by a sharp increase in the euro area. This has led many financial analysts to predict that the euro area will experience economic growth of around two percent this year, up from the initial rate of two percent reported for the first quarter of this year. However, Mario Draghi, the head of the European Central Bank, said on Friday that he did not see any reason why the euro should weaken against the dollar. He also pointed out that the euro area as a whole is growing faster than the United States or the United Kingdom. Draghi added that it is likely that the euro would remain the international currency against the currencies of other countries, even if the euro zone as a whole continues to grow.
These are the factors used by forex traders to determine the direction of the currency pair they are trading. A trader may choose to purchase the EURUSD in the hope of driving up the euro, while selling the EURUSD short in the hope of driving down the euro. Both of these moves have different consequences for the Forex market. Prices may rise or fall in correlation with the direction of the market. The fundamental Forex forecast looks at the long-term trend of the currency pairs, whereas the technical analysis looks at short-term fluctuations. Both of these forecasts are used to make profits for the traders who make use of them.