The EUR/USD currency pair continues to demonstrate an overall bearish momentum this week before the release of critical data for the past month, which was plagued by a series of challenges.
The week was perhaps the most challenging that the markets have experienced in a while, mainly due to the coronavirus pandemic which has become a global pandemic. The situation has negatively affected the business community, as well as global trade, thus causing panic in the global financial markets. It is thus no surprise that the EUR/USD currency pair has performed the way it has this week.
The EUR/USD currency pair kicked off this week at a high of 1.1106 on Monday morning before the bears took over the helm, pushing the price down dramatically to a low 1.0794 on Friday as per the time of this press. News releases about economic policy adjustments especially in the U.S may have influenced the dollar’s rally against the Euro, thus the strong bearish trend.
The bears may have also gained their strength from the reports of the deteriorating market conditions in the UK. The situation may have further been exasperated by worrying UK PMI data, which contributed to the Euro’s decline as investors lost confidence. The U.S dollar’s strong performance might be attributed to the fact that central banks have been rushing to increase their dollar holdings to be better prepared for the economic fallout caused by the coronavirus. The same case applies to investors, as many of the other global currencies have been losing value, thus the use of the dollar as a safe haven currency.
Meanwhile, the Euro is one of the currencies that have been hit hard by the ongoing economic slowdown. This is in line with the fact that the UK economy has experienced a significant slowdown over the past month as the situation continues to deteriorate. March was one of the worst months for many economies across the world. For now, we can only hope that the viral threat will soon be subdued so that normalcy may be restored and economies can start recovering.