Weaker EUR supports exports

The depreciation of the EUR is mainly due to monetary policy divergence between the ECB, which is becoming more and more expansionary, and the US Fed, which is approaching policy tightening.

In trade-weighted terms, the EUR is now some 15% weaker than a year ago.

Nordea Bank notes...

• This supports exports to such a degree that we expect external trade to contribute positively to GDP growth, too.
  
  
• On the domestic front, growth gets support from both fiscal and monetary policy.
  
  
• After years of tax hikes and cuts in public spending, fiscal policy is no longer a drag on growth.
  
  
• This does not only mean that governments no longer restrain growth; it also supports consumer and business sentiment.