EUR/USD loses further ground and approaches 1.0100.The greenback reverses the initial decline and surpasses 107.00.
Sellers quickly returned to the European currency and dragged EUR/USD to fresh multi-session lows in the vicinity of 1.0100 on Tuesday.EUR/USD offered ahead of FOMC.
EUR/USD rapidly abandoned the area around 1.0250 to retreated nearly 15 cents after EU countries decided to reduce the gas consumption in the next winter, all following the decision by Russian giant Gazprom to cap the supply of gas to the old continent to around 20%.
The decision sparked recession fears in the euro area at the time when the IMF cut the growth prospects for 2023 and several major banks now see the region entering recession at some point in Q4.
Absent releases in the euro area, the US Consumer Confidence tracked by the Conference Board eased to 95.7 in July, while New Home Sales contracted 8.1% MoM in June, or .59M units. Earlier in the session, the FHFA’s House Price Index rose 1.4% in May from a month before.
What to look for around EUR
EUR/USD remains under pressure in the pre-FOMC and threatens to revisit the 1.0100 region amidst the sudden resumption of the demand for the greenback.
Renewed market chatter surrounding the likelihood of an economic slowdown in the euro area in the medium term seems to have resurfaced and weigh on the European currency ahead of the upcoming FOMC event on Wednesday.
In the meantime, the price action around the European currency closely follows increasing speculation of a probable recession in the euro area, dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
EUR/USD tumbles towards 1.1000, bounces modestly
EUR/USD fell to 1.0115 amid the European gas crisis and fears of a global recession. Unimpressive US data adds to ruling concerns as CB Consumer Confidence contracted by more than anticipated in July, down to 95.7 in July, down for a third consecutive month.
GBP/USD battles to recover the 1.2000 threshold
GBP/USD recovered modestly from an intraday low of 1.1963 but struggles to recover beyond the 1.2000 threshold amid a risk-averse environment. The absence of positive developments around the UK political scenario weighs on the pound.
Gold surrenders intraday gains amid modest USD strength
Gold attracted some selling near the $1,728 region on Tuesday and retreated to the lower end of its daily range during the first half of the European session. The XAU/USD was last seen trading just below the $1,720 level.