EURUSD hits its lowest level since July 2020

Last Updated on November 23, 2021

EURUSD continued to decline in the morning trading on Monday in the European market, and recorded the second consecutive daily decline, to trade near its lowest level in 16 months, which is recorded earlier in trading last Friday, and this comes with renewed concerns regarding the expansion of the spread of the Coronavirus again in Europe, which would increase the chances of European governments to take closure measures.

EURUSD

EURUSD continues to decline

The EURUSD pair traded at the level of $1.1260, losing about 0.3% from the opening level of today’s session at $1.1291, and the pair closed trading on Friday, incurring losses by about 0.75%, to reach its lowest level in 16 months at $1.1250, with the increase in sales of the single currency.

The single currency recorded the second consecutive weekly decline at the end of trading last week, with losses amounting to about 1.4%, the largest since last June, due to the growing fears of a widening divergence between monetary policy tracks in Europe and the United States.

Spread of covid 19 in Europe

Europe is experiencing a new coronavirus boom, which has led many investors to worry about economic growth in the region.

The average number of new cases in Germany is about 45,000 per day, while the number of hospitalizations has increased, and similarly, the number of daily infections with the Covid virus in Italy has been on an upward trend.

The worst affected countries are the Netherlands and Austria. The Austrian government said in a statement on Friday that it will start a new lockdown this week. The announcement led to major protests over the weekend, and Germany is also considering some form of restrictions.

Therefore, the EUR/USD collapsed as soon as analysts predicted that a new wave of the pandemic would have an impact on the European economy, and therefore, this trend would have an impact on the ECB’s decision.

The European Central Bank has looked a bit dovish in the past few months, and while it has begun to taper off, analysts believe it has been relatively slow compared to other central banks such as the Federal Reserve and the Bank of England, as evidenced in comments by European Central Bank President Christine Lagarde on Monday.

Looking to the future, the single currency will react to new trends in Covid-19 in Europe, most importantly, it will react to President Biden’s decision on the next Federal Reserve chair, and Jerome Powell is expected to choose the incumbent or Lyle Brainard.

The pair will also react to the latest US GDP data due on Wednesday and Eurozone inflation numbers

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

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