EUR/USD: Five reasons for the euro's decline – Citibank

Dhwani Mehta FXStreet

Analysts at Citigroup discuss the key five reasons for the euro’s recent decline to multi-year lows sub-1.0800 levels.

Key Quotes:

"Reasons for EUR's decline - (1) EU less US (hard) data momentum is turning negative; (2) Downward revisions to Chinese and global growth in the face of the COVID-19 outbreak to impact the euro zone more given supply chain linkages between Europe and China - a supply chain recovery remains problematic in the near term even if Coronavirus sentiment makes an immediate turn; (3) Foreign (Japanese and European) investor buying of US bonds FX unhedged; (4) A poor technical picture; (5) Rising political risks in Germany and Italy.

Bottom Line - Drivers 1, 2, 3 & 4 are interlinked and would likely recede if the Coronavirus outlook improves.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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