- EUR/USD tries to correct a touch higher as oil prices start to deteriorate from a 14-year high.
- Traders look to the ECB for clarification of the renewed dovish stance vs the Fed's hawkish pitch.
EUR/USD is attempting to correct higher in Asia, following the lead from yesterday's trade where the price established just ahead of 1.08 the figure where it was pinned near a 22-month low.
The was in Ukraine is a black cloud over Europe's economic outlook and the US dollar is being favoured over the single currency on the basis of the central bank divergence. The greenback rose on Monday, lifted by safe-haven flows as well, as investors weighed the effects on the global economic growth of oil prices. They were peaking at a 14-year high but are starting to come off a touch with is giving some relief to the euro in Tokyo on Tuesday,
The United States and European allies have considered banning Russian crude imports which sent Brent, the global benchmark for oil prices, to $138bbls. The dollar index (DXY), which measures the value of the greenback against six global peers, was trading as higher 99.42 overnight as well, sending the common currency down 4% on the dollar since Russia launched what it calls a "special military operation" in Ukraine.
ECB in focus
The economic implications for the eurozone due to the war will require the ECB to maintain maximum flexibility for its road to normalisation. The divergence between the ECB and Federal Reserve is favouring the US dollar which leaves 1.0800 vulnerable for the days ahead, depending on the outcome of the ECB.
Meanwhile, the week is going to be absent of Fed speakers due to the media embargo ahead of next week’s FOMC meeting, but the market is fully priced for a 25 bp hike on March 16 as the start of the tightening cycle.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trims gains, back below 1.1300
EUR/USD gained bullish traction on Monday, climbing above the 1.1300 mark as the US Dollar came under sustained selling pressure. The move followed Moody’s downgrade of the US sovereign credit rating, which added to the pair’s upside momentum.
GBP/USD sticks to daily gains around 1.3360
GBP/USD extended its rally on Monday, briefly surpassing the 1.3400 mark on the back of renewed weakness in the Greenback, which was particulalry exacerbated following Moody’s decision to downgrade the US credit rating by one notch.
Gold meets daily resistance around $3,250
Gold regained momentum on Monday, climbing toward the $3,250 mark per troy ounce in response to a cautious market tone. In fact, investors sought safe-haven assets in response to Moody’s downgrade of the US government’s credit rating and renewed trade concerns.
Stock futures contract after Moody's US debt downgrade Premium
US stocks opened on a sour note on Monday following the fallout late Friday when the Moody's credit rating agency lowered its outlook on US debt from Aaa to Aa1. Moody's had already had the US government on watch for a year and half, so the actual downgrade shouldn't have surprised investors too much.
China April slowdown shows the impact of economic uncertainty
Trade war uncertainty is denting Chinese confidence, resulting in slower economic activity in April. Retail sales and fixed-asset investment both underperformed forecasts amid heightened caution. Yet the impact on manufacturing was less than feared.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.