Forex
The euro has been unable to hold on to the gains that followed the announcement by the European Central Bank that the phasing out of its asset purchase program is to gather pace, despite the uncertainty generated by the conflict in Ukraine. The ongoing energy crisis is exacerbating inflationary pressures in the old continent, while economic growth prospects suffer due to exposure to the war on its eastern flank. The ECB is sticking with its intention to tighten policies, in a move that is designed to contain escalating consumer prices but may end up hurting growth, while also triggering concerns over the impact the end of asset purchases may have on the spread between German and gouthern European debt. In such a scenario the outlook for the euro doesn’t look great, with further losses likely, especially in relation to the US dollar.
Ricardo Evangelista – Senior Analyst, ActivTrades
