Investors eye euro close to $1.0830, its lowest since April 2017, after German’s ZEW survey showed that investor’s confidence slipped.
The German survey fuelled growing pessimism about the outlook for Europe’s largest economy.
The common currency has lost 3.4% of its value against the U.S. dollar so far this year. Weak manufacturing and gross domestic product data from Germany suggested the euro zone is more vulnerable than previously. At the same time, the U.S. economy proved more resilient than the rest of the world.
The euro traded close to a three-year low down 0.1% at $1.0830.
Poor economic data in the euro area raised concerns that euro zone monetary policy will have to remain looser for longer.
On the Brexit front, Prime Minister Boris Johnson’s Europe adviser, David Frost, said Britain would not be threatened into following EU rules to win a free-trade agreement with the bloc. Frost’s comments contrasted with those of European Commission President. Ursula von der Leyen has called on Britain to guarantee fair competition based on ambitious environmental and labor standards.
Further, Minutes from the Reserve Bank of Australia’s first meeting of the year fuelled expectations of lower interest rates. The RBA left rates at a record low of 0.75% at that meeting. But the minutes showed it was prepared to ease policy further if needed.
China said on Tuesday it would accept applications for new tariff exemptions for 696 products imported from the United States.
START TRADINGForex – Euro close to a three-year low
The Australian dollar fell 0.5% to 0.6681 against the U.S. dollar, a one-week low. The Aussie has also been buffeted by the coronavirus because of Australia’s extensive trade ties with China.
The Japanese yen rose to a five-day high of 109.66 against the U.S. dollar on the back of the coronavirus outbreak. Almost twice as many Chinese medical workers have been infected by coronavirus as officially reported by the government.
The British pound limbed past the $1.30 mark after British finance minister Rishi Sunak said he would deliver the budget as planned on March 11. The pound, earlier down against both the dollar and the euro on conflicting views put forth by Britain and the European Union on trade negotiations, gradually reversed losses to trade positive on the day.
By 1148 GMT, the pound was 0.3% higher to both the dollar at $1.3038 and the euro at 83.05 pence.
In commodities, oil prices fell below $57 a barrel, pressured by concerns over the impact on oil demand from the coronavirus outbreak in China. A lack of further action by OPEC and its allies to support the market weigh on prices.
Brent crude was down $1.02 at $56.65 a barrel by 1100 GMT after rallying in the previous five sessions. U.S. West Texas Intermediate crude fell 82 cents to $51.23.
Gold prices scale two-week high as coronavirus hits business. A revenue warning from iPhone maker Apple due to coronavirus, exacerbated fears of the outbreak’s impact on global economic growth.
Spot gold was up 0.4% at $1,587.06 per ounce by 1044 GMT, having earlier risen to its highest since Feb. 3 at $1,589.40.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money