EUR/USD is under heavy selling as the US dollar keeps rallying amid risk-aversion.
Recession fears amid deepening Germany’s energy crisis add to EUR’s misery.The sell-off in the Treasury yields fail to lend support to the major.
EUR/USD is falling like a house of cards, having surrendered the 1.0200 mark amid intense buying pressure seen around the US dollar.
The greenback remains the go-to safe-haven asset, as dismal Chinese data-led resurfacing growth fears spook investors’ sentiment.Risk-off flows continue to dominate even as the American trading gets underway, with the downbeat Empire Manufacturing Survey and NAHB index doing little to deter dollar bulls.
Markets prefer to pile onto the dollars heading into Wednesday’s FOMC minutes showdown, which may reveal Fed policymakers’ intent on the size of the future rate rises. The minutes may influence the market’s pricing of the September Fed rate hike, eventually impacting the USD valuations.
Meanwhile, the souring sentiment-driven sell-off in the US Treasury yields fail to lend any support to the spot. The main currency pair also remains undermined by growing recession risks in the euro area. Europe’s economic powerhouse, Germany, could enter into a recession amid the deepening energy crisis, with sinking Rhine waters making shipping along the river harder and adding to the supply-side issue.
Further up the river in Kaub, a noted bottleneck for shipping where the Rhine runs narrow and shallow, the reference level dropped below 40 centimeters, which could probably temper coal counts among key cargo moved on the waterway.
In the last hour, Economy Minister Robert Habeck said that “Germany had to introduce its new levy to help utilities cover the cost of replacing Russian supplies or else its energy market would collapse.” EUR bulls shrugged off Habeck’s comments amid relentless dollar demand.
EUR/USD falls below 1.0200 on broad dollar strength
After having staged a rebound in the early American session, EUR/USD has lost its traction and declined below 1.0200. The dollar preserves its strength in the risk-averse market environment on Monday, not allowing the pair to gather recovery momentum.
GBP/USD fails to hold above 1.2100
GBP/USD is having a difficult time shaking off the bearish pressure on Monday and trading below 1.2100. The dollar continues to capitalize on safe-haven flows at the beginning of the week with the US Dollar Index clinging to strong gains above 106.00.
Gold buying intensity eases amid growth concerns
Gold fell to a one-week low on Monday as risk aversion benefited the dollar against all of its major rivals. XAUUSD managed to bounce after the US opening, as Wall Street opened in positive territory despite the ruling dismal market mood.