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EUR/USD Stays Depressed, Off Low Points Near 1.0820

The Euro did not have so much respite as the new week opened for business. It is another blow of weakness that has sent the EUR/USD currency pair down to an unprecedented low point close to 1.0820.

EUR/USD price chart. Source TradingView

Geopolitical Concerns Affect the Pair

The EUR/USD pair accelerated downward to the 1.0825/20 zones very early in the session, where there was some contention for it. With the present condition of things of the past couple of weeks, ongoing concerns with regards to the conflict in Ukraine have kept on dictating the atmosphere in global financial markets while seeing an apparent preference of investors in safe-haven commodities and assets, especially the US dollar.

In Germany, the money market activities have seen the ten-year bond yields moving through the low ends of the monthly range in the vicinity of -0.06%. It was heavily weighed down by the conflict in Eastern Europe.

What’s featured in the European docket list include Germany’s Retail Sales that expanded by 10.3% on the year, and the Factory Orders increased by 1.8% from February. In the Eurozone generally, Sentix Index that tracks investors’ confidence recorded a worse figure at -7.0 for the month of March.

What to Watch Out for in the Euro

The EUR/USD pair fell to points last seen in May of 2020 in the vicinity of the 1.0800 line on Monday. It is expected that the Euro will be under continuous pressure as long as the war between Russia and Ukraine lasts as well as the constant risk aversion, in spite of the fact that it boosts the safe-haven sector.

In the long run, some strength of the pair will be underpinned by bets of a likely interest rate increase by the European Central Bank, possibly sooner than many expected. It will also be underpinned by increased German bond yields, persistent inflation, a good pace of economic recovery, and an exciting result from some crucial data in the Eurozone. 

Essential Issues in the Eurozone

Speculations surrounding the European Central Bank’s monetary policy are expected later in the year. Events surrounding the French presidential election are scheduled to come up in April. Issues around the conflict between Russia and Ukraine, along with talks holding in Belarus to have a ceasefire agreement. A general post-pandemic economic recovery plan for the Eurozone.

Germany’s Retail Sales and Sentix Index reports are expected on Monday. EMU Flash Quarter 4 GDP is scheduled on Tuesday. The ECB’s decision on interest rate increase is expected on Thursday. 

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