Euro to be supported over next few weeks

Matthew Ryan, CFA Ebury

Germany's troubled industrial sector saw some genuinely hopeful reports last week. November industrial production surprised to the upside, posting growth for the second straight month for the first time since May 2023.

Even more surprising was a blowout number for factory orders (up 5.6% MoM vs. +1.0% estimate), which bodes well for future activity and may signal that the impact from last year’s massive infrastructure stimulus package is finally starting to be felt.

As we’ve outlined in our 2026 Global Outlook, we see this as one of our main calls for the coming year.

With inflation seemingly under control in the Euro Area, the ECB is in a good place to keep rates steady throughout 2026. The progressive closing of the interest rate gap with the US and positive economic news should support the common currency over the next few weeks.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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