EUR/USD Reaches New Five Years Low Under 1.0636

EUR/USD market has broken this year’s lows of 1.0636 on a continuously held basis, as it now heads in the direction of 1.0600, a price level which has not been reached since the fourth month (April) of 2017. which is the five years low

Continuous purchasing interest perceived in the USD (US dollar), because it is a safe-haven currency is affecting the EUR value, causing it to continue falling.

Increasing anxiety about China’s coronavirus lockdown and its effect on the world’s supply chain revived development worries, which sustains the liveliness of US dollars demand.

During this, news that Russia will stop the supply of gas to some European countries such as Poland and Bulgaria, as the confrontation between Russia and Europe grows further depresses the euro. This happened following the EU’s (European Union) consideration of a maximum price that will be paid to importers of oil from Russia.

Current Situation and What Next as EURUSD Hits Five Years Low?

EUR buyers and sellers keep paying no attention to hawkish European Central Bank (ECB) speak, as Martin Kazak a policymaker disclosed yesterday, that he would want the 1st rate hike to occur in the seventh month of this year (July), following the APP (currency purchase program) comes to an end at the beginning of the month (July).

Anticipation of a combined-dose Federal Reserve rate hike next month (May), and also, July underpin Federal Reserve System to European Central Bank monetary divergence, which will keep the dollar favored.

All attention is now set on Christine Lagarde (ECB President) later today (Wednesday), as there are no economic releases from both sides of the Atlantic.

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