Artem Voloskovets
The EUR/USD pair is lower for the day as it stays near 0.8494 and shows a small decrease of 0.05%. Price data is in a slow downward direction because occasional increases do not last long enough to create a recovery.
In early hours the pair is near 0.8520 but the upward force is gone and results in a series of lower peak prices plus lower bottom prices. By the late afternoon, EUR/USD is closer to 0.8490 as selling continues to occur.
Short-term results are inconsistent at this time - while the pair is up by 0.20% over the last five days, the general movement is downward with a 1.55% loss over one month and a 3.39% loss over the last year.
What’s Driving the Move
As for the cause the current low value of EUR/USD is likely because of different interest rates, a high value for the dollar and uncertain economic conditions. Because the U.S. dollar is strong because of high yields but also steady economic data, the euro stays low. At the same time the demand for the currency is low because of worries about growth in Europe, the price of energy and risks in global politics.
What It Could Impact
If the euro stays weak, there are many effects on the market - it is possible that exports from Europe increase because goods are less expensive for other countries - but the cost to import goods is higher, especially for energy and materials that people buy with dollars. For the financial markets, the low value of the euro is a factor for how money moves, what people expect for inflation as well as the future plans of the ECB.
To conclude the fact that the price is not above 0.85 shows that more individuals are selling than buying. On the charts traders are looking to see if the price stays steady at the support level between 0.8480 and 0.8490 soon.
Artem Voloskovets
