Euro languishes near two-month lows on higher Oil prices, weak Eurozone data

The Euro hovers right above 1.1500, consolidating losses after a 0.75% sell-off on Friday.
Eurozone Sentix Confidence Index and German Factory Orders depict a grim economic outlook.
Growing tensions in the Middle East have boosted Oil prices, adding pressure on the common currency.

Guillermo Alcala FXStreet

The Euro (EUR) consolidates losses against the US Dollar (USD) on Monday, trading at 1.1515 at the time of writing, following a 0.75% sell-off on Friday. A mix of higher Oil prices, as tensions in the Middle East simmer, growing hopes of Federal Reserve (Fed) rate hikes, and downbeat Eurozone data has created a perfect storm for the common currency at the week's opening.

The Eurozone Sentix Investors’ Confidence Index improved to -13.4 in June from -16.4 in May, but remains at deeply negative levels, hinting at a dismal investors' mood and below the levels around zero, seen before the US-Israel attack on Iran and the ensuing blockade of the Strait of Hormuz.

Earlier on the day, German Industrial Orders dropped 3.8% in April, more than three times the 1.2% drop anticipated by the market consensus. Beyond that, March figures have been revised down to a 4.5% increase from the previous 5.0% estimate.

Higher Oil prices add pressure on the Euro

In the geopolitical domain, Iran-backed Houthi Militias confirmed attacks on Israel, after Tel Aviv announced that they targeted military sites in Iran, in retaliation for a new barrage of missiles launched towards northern Israel. Iranian authorities have threatened US bases in Gulf countries in the most serious escalation of the hostilities since Washington and Tehran signed a fragile ceasefire in mid-April.

The escalating tensions have sent Oil prices nearly $5 higher, as the barrel of Brent Crude rises to $96.37 at the time of writing, from Friday’s close of $92. These prices pose significant pressure on oil-importing Eurozone economies and weigh heavily on speculative demand for the Euro.

On Friday, the US Labour Statistics Office revealed that Nonfarm Payrolls rose by 172K in May, beating expectations of an 85K rise, while April’s figures were upwardly revised to 179K from previous estimates of a 115K increase. These numbers confirm that employment creation is gathering pace in the US in 2026, after a weak 2025 year, and boost hopes that the Federal Reserve will tighten its monetary policy later this year, which has sent the US Dollar higher across the board.

Economic Indicator

Sentix Investor Confidence

With among 1600 financial analysts and institutional investors, the Sentix Investor Confidence is a monthly survey which shows the market opinion about the current economic situation and the expectations for the next semester. The index, released by the Sentix GmbH, is composed by 36 different indicators. Usually, a higher reading is seen as positive for the Eurozone, that means positive, or bullish, for the Euro, While a lower number is seen negative or bearish for the unique currency.

Economic Indicator

Factory Orders s.a. (MoM)

The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.

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