Continued weakness with the euro has become a focal point with currency markets as the central bank of Europe continued with its stimulus efforts by keeping key rates at historical lows in Europe. The combination of Brexit and ECB stimulus efforts have gradually been adding downward pressure on the euro throughout the year. The ECB commitment to buy government and corporate bonds in Europe has greatly influenced the ultra low rate environment.
A weak euro may bring about inflationary pressures in those countries that rely on imports, while countries relying on exports, such as Germany, could benefit with a weak euro allowing for greater exports and economic activity.
Sources: ECB, Eurostat, Bloomberg