What Will Affect the Euro in the Coming Year?
The Eurozone is currently navigating its way through its most turbulent time since forming in 1999. Theories about the union’s value and future continue to arise as businesses, individuals and governments all consider the impacts of recent events and prepare for those which lie in store.
All 19 Eurozone members which currently use the Euro as currency, along with the EU’s further nine members and the other major currencies are all keeping a close watch on developments.
One of the most interesting aspects about economic markets is the difficulty in predicting anything and a number of factors could affect the Euro in the next few months.
Greece
Greece has dominated the majority of financial (and general) news in the past few months but finally a third bailout deal for the country was agreed. This has made any chance of the country leaving the Euro seem unlikely, at least in the next year, and should instead point towards a stronger Euro.
However, a lot will depend on how the country rebuilds its economy. After all, this is their third bailout so it hasn’t worked out well in the past. Further big problems could possibly lead to a Greek exit from the Euro which would have massive implications for the currency market.
Elections
Spain has already seen some interesting changes in its political landscape after anti-austerity parties fared well in May’s local elections. A general election is due although it may not be called until January 2016.
As another country to receive billions of euros in loan help a few years ago, depending on the victorious party after the election, the country may seek debt restructures after Greece’s third bailout deal success.
Portugal will also be holding a general election at the beginning of 2016 and are another country who received billions in loans a few years ago. Unlike Greece and Spain they’ve maintained political stability but getting their economic situation back on track is still crucial.
Speculation
The speculation surrounding Greece and the results of general elections is sure to put some investors off the Euro. For businesses there is also the chance that the ECB will aim to purposefully weaken it to help improve Eurozone export competitiveness.
Speculation is the base for a lot of forex trading though and this current time presents a great opportunity for profit using FxPro forex trading, especially if it does fall again. The situation is hard to predict but the Euro is sure to strengthen again over time.
Category: Banking
