Eurozone to end 2016 with relatively robust economic growth, likely to slow in 2017 - BNP Paribas

Improving confidence proved Eurozone's resilience after political events since the summer. Data so far also suggest a slightly more optimistic outlook for coming months supported by export orders and the depreciation of the euro. However, political risks remain tilted to the downside.

The Eurozone economy proved resilient to adverse shocks over the course of this year and will likely end the year with a relatively robust economic growth.

“Survey data available so far – such as the composite PMI and the European Commission’s economic sentiment indicator – are consistent with above-trend GDP growth of about 0.4% q/q in Q4, up from 0.3% in Q3, which would leave average GDP growth at 1.6% for this year.” analysts at BNP Paribas notes

Real household income growth shall remain under pressure as higher energy prices push up headline inflation. A slowdown in exports to the UK, which accounts for about 14 percent of the Eurozone’s goods exports might be a denting factor. Reduced support to growth is seen from both monetary policy (fading QE effects) and fiscal policy.

“We are looking at a slowdown from last year’s 1.9% growth with a further moderation to come over 2017, on average, to 1.2%. adds BNP Paribas

FxWirePro's Hourly EUR Spot Index was at 80.632 (Bullish) at 1325 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.