The euro is depreciating for the third consecutive day on Tuesday, reaching levels only a few pips above the August 20 low at 1.1663. A stronger USD on the back of higher US bond yields and the surging gas prices in Europe are weighing heavily on the common currency.
The euro suffers against a stronger US dollar
The US bond yields’ positive trend, with the benchmark 10-year note rallying beyond 1.5 is boosting the greenback’s attractiveness for the investors. The Federal Reserve’s signals towards the end of the Quantitative Easing era are pushing US yields higher.
In Europe, the energy crisis, with gas prices surging and with inventories at historical lows is casting doubt about the post-pandemic recovery in the region. Beyond that, ECB’s commitment to the current accommodative stance adds negative pressure on the euro.
EUR/USD: Below 1.1664, next target will be 1.1600 – Rabobank
The Rabobank FX Analysis Team expects the pair to remain under pressure amid the ECB’s dovish policy and the uncertain regional growth prospects: “Given that the prospect of a Fed funds rate at the end is live in the market and given growth concerns in emerging markets, our six-month EUR/USD target of 1.16 looks set to be hit sooner than we had been anticipating.”
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.