- U.S Dollar resurgence
- Coronavirus Fears
- Weak EU Economic data
The EUR/USD pair started the week subdued at two weeks and was at risk of edging lower, amidst a resurgent U.S Dollar. The greenback started the week on a roll touching three-week high, as renewed worries about coronavirus forced investors into safe-havens.
EUR has struggled to hold on to gains after registering one of the longest runs of gains against the Dollar. After rallying to highs of $1.14, the EUR/USD pair has come down tumbling on the Dollar strengthening across the board amidst growing concerns about economic recession and COVID-19 pandemic.
The greenback was higher Monday morning as the U.S reported more than 30,000 coronavirus cases on Friday and Saturday. The spike in infections continue to rattle traders sentiments arousing concerns of renewed calls for lockdowns that could end up taking a toll on an already stretched economy.
The second wave of coronavirus infections could mean more losses for the Euro to the U.S dollar exchange rate as the Dollar is expected to strengthen across the board. The greenback tends to do well in times of crisis as traders bet on it as a safe-haven.
The Euro, on the other hand, remains on edge as a plethora of weak economic data continues to arouse concerns about the health of the Eurozone economy. The release of June PMI projections should paint a clear picture of how the economy is doing following recent reopening across the bloc.
Poor economic data should pile more pressure on the Euro, which has been on the defensive against the Dollar in recent weeks. Similarly, disagreement among European leaders on how to revitalize the ailing economies should continue to rattle investors’ sentiments on the Euro, which could see it weaken even further.
Monday promises to be a busy day for the EUR/USD pair. A number of European Central Bank speakers are lined up likely to influence trader’s sentiments on the single currency. Similarly, the focus will be on the release of Existing Home Sales in the U.S likely to influence dollar strength.