EUR/USD: Back below 1.11 as President Trump extends shutdown through April
EUR/USD has fallen back below 1.11 amid risk aversion in stocks. US President Trump's decision to extend lockdown to counter the coronavirus outbreak is likely to cause a deeper economic slowdown. Goldman Sachs believes the economic fallout has only just begun.
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The dollar is again rising amid the risk-off tone in the Asian stocks and the US equity index futures. Investors are shunning risk despite China's rate cut, possibly due to the worsening situation in the US and President Trump's decision to extend social distancing through April, which could force large parts of the economy to shut down.
Analysts at Goldman Sachs are of the opinion that the economic fallout in the West has only just begun and another sell-off in the stock markets could be seen. As a result, the US treasuries (and the US dollar) could continue to draw haven demand in the near-term.
The offered tone may further strengthen if there is a delay in the unified fiscal response from the European Union, according to ANZ research.
The data docket is heavy on Monday with the Eurozone consumer and business sentiment indices scheduled for release along with the preliminary German Consumer Price index for March. Across the pond, the focus will be on the Pending Home Sales and the Dallas Fed Manufacturing Index.
THEMES AFFECTING THE EUR/USD
SPECIAL WEEKLY FORECAST
The EUR/USD pair has staged a substantial recovery this past week, recovering toward the 1.1000 price zone after falling to 1.0635 at the beginning of the week, its lowest since April 2017.