The economic picture in the EU (European Union) is only slightly better in 2023 than in 2022. However, recent reports by individual national ministers as well as the bloc's representatives show some bright spots. Inflation continues to deal a blow to consumers, even as unemployment has remained relatively low across the continent. Likewise, the very real threat of a recession has slightly abated, and overall EU growth currently stands in the one per cent range.
While the news out of Europe is not rosy by any definition, it gives investors a chance to make predictions based on facts. The ongoing Ukraine-Russia war is the single leading factor in nearly every aspect of the economy, leading to short-term shortages of energy commodities, food inflation, and other woes. For individuals in any country, opening an online brokerage account is the first step to earning a potential profit in an otherwise sluggish financial scenario.
Investing opportunities abound
Those in Europe, the US, Asia, and anywhere else who wish to work with a regulated forex broker online can get involved in the action almost immediately. Once they set up their accounts and fund them, currency investors have the chance to purchase forex pairs and make evidence-based predictions about the relative strength of national currencies. For most forex enthusiasts, the beauty of the asset class is that the potential to earn a profit is equally possible in good, bad, or in-between economic environments.
During the height of the COVID pandemic and shortly after the Ukraine-Russia war began, speculators who guessed correctly about the fast rise in commodity prices earned substantial profits. When it comes to currencies, forex markets are the globe's largest exchange arena in terms of sheer dollar value. Trillions of dollars per day trade hands as participants predict the relative value of one national currency compared to another.
In turbulent scenarios, it can be easier to make accurate guesses about trends and the relative strength of forex currency pairs. Another advantage for individuals who work with online brokerage firms is that account minimums are either super-low or non-existent. Forex trading is easy to learn because the basic concepts are simple, and brokers offer multiple tools on their platforms. Most who are new prefer to spend a week or so on a simulator until they feel confident.
The state of the EU in early 2023
Inflation is finally beginning to decline slightly, but the number is still well above the benchmark five per cent level that is considered detrimental for citizens and workers across the bloc. Compared to late last year, however, the outlook for growth has improved somewhat. In March, EU officials announced that 2023 would likely witness a sluggish but positive expansion of about one per cent.
The war between Ukraine and Russia is the central factor in all the area's news, dominating both political and financial headlines. Two bright spots are unemployment and the immediate threat of a recession. Across the continent, most adults who want to work can find jobs, which was not the case just a year ago. Likewise, widespread energy shortages are less common in 2023, and there are fewer worries about a recession, mostly because growth rates have returned to the positive side.
Market price action
After a surge in value against the US dollar and other benchmark currencies, the Euro is expected to weaken into 2023 as the war continues to take a toll. This news comes amid recent upturns in the bloc's equities markets. Recent positive news on the inflation front is that the number would not be as high as expected. That pumped stock indices in the EU as the second quarter of the year is about to begin.
The all-important Stoxx 600, the region's major index of equity health, rose on the solid performance of food stocks, even while the banking sector suffered. Investors should keep a watchful eye on the prospect of peace talks as well as the relative strength of the Euro against the US dollar and the Japanese yen. Those three currencies are inextricably linked in forex markets and tend to accurately reflect the relative economic strength of each nation.
Consumer prices are a continuing burden for residents of the European bloc but considering recent not-terrible economic news by officials, there's some optimism that once the Ukraine-Russia war is over, the region's economy could enjoy a sustained period of recovery. War complicated the post-COVID resurgence in many of the world's nations but mostly in the geographic area where it's taking place, Europe. The fact that most major segments of the EU's economy have held up throughout war, international supply chain problems, and global inflation is cause for optimism.
Disclaimer: The information provided in this article is solely for promotional and informational purposes and should not be construed as investment, tax or legal advice.