Euro Remains Strong

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Euro Remains Strong

Euro Remains Strong While Sterling Struggles

According to the analysts from Lloyds Bank, the Euro is expected to remain strong while the GBP has tough times ahead of it.

The Sterling will remain under pressure due to the UK's weaker economy and other structural challenges. At the same time, the Euro will thrive on a positive macro backdrop and better fundamentals.

Gbp Faces Multiple Challenges

For the GBP, there are multiple headwinds, including the domestic political situation. At the same time, the economy faces multiple issues which can keep the Pound under pressure.

They added that the recent data coming from the UK is mixed and not reassuring at all. They pointed towards the stronger inflation, weak labor market, and the lackluster results from business surveys. All of this is enough to take any confidence away from the GBP.

Meanwhile, the growth momentum is also very weak. After all, the UK is going through a period of soft growth, which will lead to fiscal issues. In addition, the market is also getting ready for tax rises while the economy remains stagnant.

At the same time, the UK exports are under pressure due to the global trade tensions. So, it makes total sense for the GBP to struggle.

Looking ahead, the BoE is expected to proceed with more rate cuts. According to Lloyds Bank, the BoE will cut the rates gradually, and it will actually benefit the economy. However, this will bring the Pound lower as it is still overvalued.

On the other hand, Lloyds Bank is very bullish on the Euro. According to them, the EU economy is very resilient and can easily handle the trade tariffs.

Also, the economic indicators show that activity has been going up. At the same time, the inflation situation has also improved for the Euro. All of this is nothing but good news for the Euro and it will eventually help the shared currency in the coming months.

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