At the beginning of this week, American and European currencies again converged in a battle on the financial field. Each of the trading instruments seeks to gain more bonuses and push the opponent. The current confrontation of currencies may drag on, analysts say.
Over the course of this week, the European currency will be supported by positive dynamics in gold. Recall that both assets are positively correlated with each other. However, experts warn that there are things that can knock the soil out from under the feet of the euro, and one of which is the statistics from the USA on the labor market for January 2020. Although the explosion of volatility after Friday's data on the US labor market came to naught, analysts recorded a reduction in the spread of profitability of 2-year and 10-year treasury bonds. Experts suggest that at a time like this, investors often sell euros and increase purchases of the dollar.
Another factor in the weakening of the single currency was the disappointing data on the level of industrial production of some eurozone countries. The European currency sharply sagged after the information about the collapse of industrial production in Italy, where experts have recorded a drop of 4.3%. Germany, on the other hand, previously demonstrated disastrous data that the decline in industrial production broke all records and amounted to 6.8%. Against this background, the EUR / USD pair entered a downward peak and is now continuing this movement.
On Monday, February 10, the pair tried to stay within 1.0951–1.0952, but a further fall was inevitable.
Towards the evening, the tandem headed for 1.0930, and the chances of recovery were lost. The pair then desperately slipped to the bottom.
On Tuesday, February 11, the tandem reached 1.0907–1.0908, struggling on this day in vain attempts to get out. Nevertheless, analysts expect a restoration of the balance in the EUR / USD pair in the medium term.
In this classic tandem, the euro has the most difficult task, because, unlike greenback, the power of the American economy is not behind it. According to experts, the dollar, which has taken a strengthening course, continues to follow it, which seriously weakens the Euro. They also emphasized that the greenback is growing in the face of reduced demand for risky assets.
The euro has fallen to its lowest level in the past few months, while the US dollar is showing resilience and endurance, especially in connection with the epidemic of coronavirus, which threatens the global economy. Analysts said that, in this rivalry, the greenback wins and the euro has yet to win luck to its side.
