Euro worst performing major currency on negative German yields

  • All posts
    All posts|Currency Updates
    All posts|Currency Updates|International Trade
    All posts|In The News
    All posts|International Trade
    Charities & NGOs
    Currency Updates
    Currency Updates|In The News
    In The News
    In The News|Press
    International Trade
  • Latest

27 March 2019


The Euro was the worst performing major currency on Tuesday.

he common currency edged towards the 1.125 level against the US Dollar, shedding around half a percent of its value during the course of London trading yesterday. There were no major catalysts behind the move, with traders citing concerns over the recent sharp slowdown in the Euro-area economy, namely in Germany, and a rather drastic decline in German bond yields.

Government bond yields in Germany have continued to trend lower since the beginning of the year, dragged lower by the generally rotten set of macroeconomic news out of the country. The benchmark 10-year bund yield has even fallen into negative territory in the past few days for the first time since October 2016. This far from provides an attractive proposition for foreign investors and is likely to help keep the Euro pinned around its currently lowly levels in the coming sessions.

A host of speeches from European Central Bank members are likely to dominate the newsflow out of the Eurozone today. President Draghi spoke in Frankfurt this morning, reiterating that risks to the bloc’s economy remain “tilted to the downside”. A combination of weak economic data and a dovish central bank are the main reasons why we remain one of the most bearish forecasters for EUR/USD on Bloomberg for 2019.

House of Commons to vote on Brexit alternatives

Sterling remained fairly resilient yesterday, ending trading roughly where it began it versus the greenback ahead of a series of indicative votes in the House of Commons today.

The so-called indicative votes, which allow MPs to vote against their stated party line, have been made possible after MPs voted to take control of the EU exit process on Monday, the first time parliament has seized control of the government in 100 years. It is hoped that the voting could yield a majority in favour of an alternative Brexit option, whether that be, for instance, supporting May’s deal without the backstop, holding another referendum or revoking Article 50.

Voting is expected to take place at 19:00 GMT tonight. A clear vote in favour of one of the alternatives, the process of which could involve whittling down the option over the next few days, may give the market a better indication on how MPs will seek to proceed with Brexit. Volatility in the Pound is expected to remain high, regardless of the outcome of the votes.