Sell-off EUR Biggest Pressure Comes From 5 Things, Here is The Details..

EUR getting more lower, EUR currency is one of the worst-performing currency, GBP also,  what is the main factors about this weaker performance, There are no shortages of reasons for the euro’s decline but the biggest pressure comes from:

1. Continued softness in Euro Zone economic data
2. US Budget deal optimism lifting USD more increase
3. Lower German yields
4. Prospect of weaker Euro Zone GDP Thursday
5. Political trouble in Spain

Forex traders could avoid going long for EUR, maybe not this time, Although industrial production fell more than expected, the sell-off EUR was driven by the rising US dollar and political trouble in Spain. Latest news from Spain, Parliament rejected the government’s 2019 budget bill, forcing the prime minister to consider an early general election, it means Spain will getting more political instability. The last time this happened was more than 2 decades ago. Prime Minister Sanchez is expected to make a decision on calling the elections by Friday and if his government falls, a right-wing coalition government could take over, which would be very bad for the euro.

Meanwhile, another bad news, German and Eurozone fourth-quarter GDP numbers are due for release on Thursday and given the sharp decline in retail sales and the central bank’s general concerns, the risk is to the downside.

Lets go back to London, Pound sterling rebound after hitting a high of 1.2960. It was no surprise to see inflation fall more than expected in January and for the year-over-year rate to slip underneath 2%. In the past week, Theresa May asked Parliament for 2 more weeks, reaffirmed her commitment to leaving the EU on March 29 and said no deal is still on the table. as reported from Investing dot com, The Labour party doesn’t want the Prime Minister to run down the clock and is pushing for a hard stop of February 26 on her process.

Theresia May will need to either present her new deal for vote or allow parliament to take control. Given the resistance of the European Union, Tory Brexiters and other parties, May is setting up for defeat, which is why we continue to believe that sterling should be trading lower and not higher.