French Prime Minister Manuel Valls, who has been calling for more action from the ECB to lower the value of the euro, says he welcomes the current weakness of the Euro. London-based investor Yannick Naud explains that the single currency is down 8 percent since May, and this is indeed “thanks to action taken by the ECB”, such as negative interest rates. But he adds that Europe’s political leaders need to be aware that monetary policy alone will not solve the Eurozone’s problems. He says it is down to competitiveness and uses Japan as an example; recent data there showed exports in Japan are down, despite having a much lower yen.

In fact, Yannick argues the ECB is now fully committed and pro-active, and he says we have to bear in mind it is the central bank of 18 different countries, all with different interests. He believes the ECB will buy more asset backed securities in the next few months.

So what does this mean for investors? Yannick thinks the euro will continue to trend lower. He adds it’s probably a good time for banks as when central banks buy asset backed securities it tends to be very beneficial for banking shares. In terms of government bonds, Yannick says that peripheral Europe “should do well in this environment” and within the sector, he favours Portugal.