Euro to US Dollar Exchange Rate: EUR Sinks as Italy’s Coronavirus Case Number Increases
The euro opened the week on a stronger-than-expected stance, following headlines over the weekend which reported that the coronavirus had suddenly spread to Italy. Euro exchange rates were higher on Monday, but market panic over the coronavirus’ impact in Europe may have finally caught up to the euro as the currency dwindled on Tuesday. The shared currency slid against major rivals even though Tuesday morning’s Eurozone data came off positive. Following a strong performance last week, euro exchange rates have been much more mixed since markets opened yesterday. Meanwhile, the US dollar slumped following an increase in interest rate cut bets for the Federal Reserve (Fed).
Euro slumps after coronavirus fears spike in Europe as Italian infections begin
The euro erased Monday’s gains as markets continued to favour the safe haven currencies amid coronavirus risks and rising infection counts in Italy. The euro has surprised the market in its recent resilience especially considering the increasing virus cases in Italy, but as the number of confirmed cases increase, the start of the euro’s downfall may be starting. Fears for Europe are increasing as most of Italy’s confirmed cases are around the financial capital of Milan, and near the confluence of Switzerland, Germany, and Austria. Despite the recent coronavirus headlines, French manufacturing confidence data for February however showed increasing optimism in the industry for the month despite China coming to a standstill.
GBP/EUR exchange rate tumbles as Brexit jitters punish the pound
The euro benefited from the pound’s tumble at the start of the week following Brexit jitters, which saw the GBPEUR exchange rate fall to 1.1945. Yesterday saw EU ministers meet to discuss the EU Brexit mandate. The main takeaway point did not surprise the market as the EU looks to keep the UK conforming to their rules in order to obtain a free trade agreement post-Brexit. The UK is expected to give their mandate on Thursday in which the market expects the converse to be true with the UK wanting to keep sovereignty and dismiss the EU’s rules as the country departs from the European Union.
USD falls as Fed Reserve rate cut odds increase
The USDEUR interbank exchange rate fell yesterday as odds of a Fed interest rate cut increased for next month. Investors in USD have received mixed signals this week as the US dollar fell from the rate cut bets, but gained from the increased fears of the coronavirus which saw many investors flock to the USD as a safe haven currency.
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