- The shared currency is trading below 1.0300, accelerating towards the 1.0250 area.
- The EUR/USD nose dived to a fresh 20-year low at 1.0246 as the market assesses parity’s chances.
- EU S&P Global Services and composite PMIs decelerated sharply as Natural gas’ higher prices struck the Eurozone.
The EUR/USD plummets to fresh twenty-year lows below the 1.0350 previous low printed on May 13, accelerating towards the 1.0250s region courtesy of a stronger US dollar. At 1.0256, the EUR/USD loses almost 1.60% on the day.
Risk aversion and the King-dollar weighs on the euro
A risk-off impulse has the safe-haven peers on the right foot. The US Dollar Index, a gauge of the greenback’s value, also advances to twenty-year highs, above the 106.50 level, up almost 1.30%, on renewed stagflation. All that despite the chances that US President Joe Biden might lift tariffs imposed on China’s products during the Trump presidency.
In the meantime, on Monday, the Bundesbank President and ECB member Joachim Nagel warned the ECB against lowering borrowing costs for EU members in the southern area. He emphasized that the central bank should focus on fighting inflation, which according to him, may require more rate hikes than projected.
Meanwhile, weakness seen in the single currency is mainly attributed to a further surge in European gas prices, which triggered fresh concerns of a recession across the Eurozone. According to Reuters, the reduction in pipeline supplies from Russia has accelerated the adjustment in stockpiles, generating upward pressure on European LNG prices.
Data-wise, the EU economic docket featured S&P Global Services and Composite PMIs for June in Spain, Italy, France, and Germany. Most readings missed expectations and are showing the economy slowing at a faster pace. In the case of the Euro area as a whole, the Services PMI reading came at 53, while the Composite stayed around 52.
Across the pond, the calendar was light, and Factory Orders for May rose by 1.6% MoM, beating the street’s estimations.
EUR/USD Key Technical Levels
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