News

The EUR/USD is under pressure, with 1.10 in the crosshairs.

  • 13 December, 2021
  • 5:15 pm EET

The EUR/USD is under pressure, with 1.10 in the crosshairs.

The latest forex news from the European trade session on December 13, 2021.

 

The market is exhibiting mixed tones to begin the week as attention switches to crucial central bank meetings in the coming days.

The dearth of important data releases, as well as the absence of noteworthy headlines, did not help the mood. This means that traders and investors will have to fend for themselves for the time being.

The dollar maintained its small climb, remaining firmer across the board. EUR/USD fell from 1.1300 to 1.1260 before reversing half of that loss. Meanwhile, the USD/JPY rose from 113.40 to 113.70 before reversing most of its gains.

The EUR/USD is under pressure due to the Omicron spread and energy concerns. Furthermore, the European Central Bank’s (ECB) monetary policy is expected to diverge from that of the Federal Reserve, driving the pair down towards the 1.10 level, according to Scotiabank experts.

 

EUR/USD is expected to rise to 1.10 by the end of the year.

“Over the weekend, Germany’s Foreign Minister Baerbock stated that the Nord Stream 2 pipeline (through the Baltic Sea) cannot be certified since it does not meet European energy law standards.” Today, Belarus’ Lukashenko warned that if the G-7 imposes fresh sanctions on Russia for its military threat in Ukraine (the other important route for Russian gas transports to Europe), his country may block gas transit via it.”

“At this week’s ECB meeting, the bank is expected to hold off on signaling exactly how (and by how much) it wants to replace the PEPP (read: augment the APP) when it expires in March.” Prior to the appearance of Omicron, the bank appeared poised to issue a less dovish decision and express hope about the economy’s recovery. However, the fresh virus wave and other constraints that appear to be depressing output over the coming few weeks and possibly months will force the ECB to postpone a clearer decision until the new year.”

“The ECB’s contrast to the Fed, which is expected to accelerate its reduction in asset purchases this week, will weigh on the EUR in the near term, pushing it into the 1.10 zone.”

 

Markets News :

  • USD leads, AUD lags on the day
  • European equities higher; S&P 500 futures up 0.2%
  • US 10-year yields down 1.9 bps to 1.47%
  • Gold up 0.4% to $1,788.94
  • WTI down 0.9% to $71.04
  • Bitcoin up 1.7% to $47,630

 

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