The Euro is likely to head higher for several reasons. First and foremost, based on the technical side, there is a lot of buying strength on the euro in the next few days. Prices are increasing at an exponential rate and that is telltale of short-term upward strength. As far as long-term price projections, the European economic forecasts are nothing short of bleak, even by today’s standards. According to Focus Economics, the Eurozone’s economy is projected to contract 4.1% in 2020, which is a downgrade of 5.1% from last month’s forecast. If the forecast has already changed so much in such a short period of time, who is to say that projections won’t get worse yet? Also, the Eurozone had several economic challenges ahead even before the coronavirus outbreak.
It has now been 3 years since the UK has requested a Brexit from the Eurozone, and without the powerful support of one of the world’s strongest economies, the Eurozone sustains a large loss from this. With the UK eventually exiting the Eurozone picture, EU parliament has called on the remaining 27 states to budget increases to support the EU’s smaller economies. Compared to the U.S. projecting excellent economic growth going into 2020 before the coronavirus outbreak, it seems EU economic growth is especially dismal news considering the Eurozone already went into 2020 with the mindset of straining economic growth before the outbreak. For these reasons, it seems apparent that the EU economy is likely to contract substantially more than fellow top currencies.