Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

FOREX-Euro drops against dollar after bleak German investor survey

Published 18/02/2020, 12:14
© Reuters.  FOREX-Euro drops against dollar after bleak German investor survey
EUR/USD
-

* Australian dollar falls to one-week low after RBA minutes

* Norway's crown plummets to 19-year low vs dollar

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates prices, adds latest news and more currencies)

By Olga Cotaga

LONDON, Feb 18 (Reuters) - The euro weakened on Tuesday,

close to the three-year low it touched on Monday, after a German

survey showed a slump in investor confidence, adding to

pessimism about the outlook for Europe's largest economy.

The euro has lost 3.4% of its value against the U.S. dollar

so far this year, as weak manufacturing and gross domestic

product data from Germany suggest the euro zone is more

vulnerable than previously thought, while the U.S. economy has

proved more resilient than the rest of the world.

The euro EUR=EBS traded down 0.1% at $1.0830, close to its

lowest since April 2017. The mood among German investors

deteriorated far more than expected in February on worries the

coronavirus outbreak that started in China would dampen world

trade, the ZEW research institute said in its monthly survey

showing economic sentiment among investors. "Breaking the EUR/USD 1.0800 level seems to be a question of

when rather than if," said Petr Krpata, chief currency

strategist at ING. "The mix of soft euro zone data, the market

pricing renewed ECB deposit rate cuts and attractive euro

funding characteristics do not bode well" for the euro.

Poor economic data in the euro area has raised concerns euro

zone monetary policy will have to remain looser for longer.

Minutes from the Reserve Bank of Australia's (RBA) first

meeting of the year similarly 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.

The Australian dollar fell 0.5% to 0.6674 against the U.S.

dollar, an eight-day low. AUD=D3 The Aussie has also been

buffeted by the coronavirus because of Australia's extensive

trade ties with China.

"If it weren't for the virus, the incredibly cheap Aussie

dollar would be definitely worth buying," said Marc-André

Fongern, head of FX research at Fongern Global Forex.

"However, investors should exercise patience as the

Australian economy looks set to face further downward pressure."

China's yuan - the most vulnerable currency to the spread of

the coronavirus - fell 0.3% to an eight-day low of 7.0110

against the dollar in the offshore market CNH=EBS .

China is racing to contain job losses as the virus batters

its economy. Norway's crown plunged to a 19-year low of 9.3365 against

the U.S. dollar. NOK=D3

The British pound remained under pressure as Britain and the

European Union laid out conflicting views on how to proceed with

trade negotiations. The currency was last up 0.2% at $1.3031

GBP=D3 .

Elsewhere, the Japanese yen rose to a five-day high of

109.66 against the U.S. dollar JPY=EBS on the back of the

coronavirus outbreak. A study showed that almost twice as many

Chinese medical workers have been infected by coronavirus as

officially reported by the government.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.