As growth stagnates in the eurozone, the euro is near 33-month low. As driven by one-off factors, the market sees soft United States data.
To poor Japan, GDP yen shows a limited response.
Investors were worried about weakening growth in the region. Thus, on Monday, the euro struggled near 3-year lows. China had efforts to limit the damage from a coronavirus outbreak. This step appeared to calm markets. Meanwhile, the Australian dollar and the Yuan are gaining.
Monday was light on economic data. Nevertheless, traders are looking to a German business sentiment indicator for Tuesday. Meanwhile, purchasing managers are indexing flash data later this week for furthering the evidence on the state of the eurozone economy.
Last week’s data was showing momentum in powerhouse economy Germany struggling in particular.
ING analysts were saying that EUR/USD seems to be comfortable to trade around its new lows. In the next few days, they expect to see a continuation in the recent downtrend rather than any clear rebound.
Euro and Others
There are fears around the coronavirus impact on the Eurozone economy. It seems to remain well in place. Nevertheless, the data this week must be in line with the latest releases in providing a non-encouraging picture.
In early trading, the euro nudged higher to $1.0845. Nevertheless, earlier it touched $1.0817, its weakest since mid-2017.
The yen was mostly unfazed by weak economic growth data elsewhere. Per dollar, it traded down 0.1% at 109.84 yen.
In three months to December, the world’s third-largest economy shrank 1.6%. It was the most significant drop in six years, hit by the sales tax hike.
Among the developed world, most market players expect growth in the United States to remain stronger. Nevertheless, Friday’s data proved a mixed picture.
Last month United States core retail sales were flat. It was lagging expectations of 0.3% growth. Nevertheless, its rise in December was revised down to 0.2%.
- Trading Instrument