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Brexit: Theresa May is preparing a series of changes to the new Brexit agreement. The euro remains under pressure against
January 22, 2019 11:21 amVideo
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The euro yesterday continued to decline in tandem with the US dollar after the release of a weak report on producer prices in Germany, which fell sharply at the end of last year.
According to the report, the producer price index in Germany in December 2018 fell by 0.4% compared with November, while on an annualized basis grew by only 2.7%. Economists had expected prices to fall by only 0.1%.
As noted in the report, the main decline was due to energy prices, which significantly subsided by the end of the year.
The report of the German Bundesbank yesterday did not greatly delight investors. The bank expects the German economy to avoid a recession at the end of 2018, but in the 4th quarter it showed a fairly moderate growth. All the reason is the disappointing situation in the industry, which has seriously suffered due to trade sanctions.
The speech of the managing director of the International Monetary Fund, Christine Lagarde, was also ignored by investors. Lagarde spoke at the World Economic Forum in Davos, which was refused to go by US President Donald Trump and key European leaders because of internal problems.
According to Christine Lagarde, the global economy is facing significantly higher risks than before. However, the global recession is not a matter of the near future, even though the risk of a more severe slowdown in global economic growth has certainly grown.
The main risks that exert pressure on the global economy, the head of the IMF Lagarde took last year’s fees, which damaged asset prices and tightened financial conditions.
Immediately after her speech, a report from the IMF was published, in which the fund lowered its forecast for global growth in 2019 to 3.5% against 3.7%, which were expected as early as October 2018 and against 3.9% expected in July The IMF called economic growth weaker than previously expected.
As for the technical picture of the currency pair EUR / USD, it remained unchanged compared with yesterday’s forecast.
It is expected that the pressure on risky assets may continue at the beginning of this week, but the bears will need to keep the pair below the resistance level of 1.1390. Yesterday’s unsuccessful attempt to return to this range formed the next wave of euro sales, and now the main task is to update larger minima around 1.1340 and 1.1310. If the bulls are quickly rehabilitated after yesterday’s fall, the level of 1.1420 will act as a large resistance, above which it was not possible to break through last week.
Brexit
The British pound rose slightly after Prime Minister Theresa May said yesterday that negotiations on Brexit would be held without delay, reiterating that there would be no second referendum on this issue. May once again noted that the main issue remains the Irish border and the changes will be associated with it. The British Prime Minister also said that she would give Parliament more freedom regarding the future trade agreement with the EU. An important change in the new agreement on Brexit may also be an amendment that will guarantee the rights of workers after Brexit.
The material has been provided by InstaForex Company – www.instaforex.com
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