The Euro is looking down again. Overview for 18.03.2020
On Wednesday afternoon, the major currency pair dropped to its three-week lows.
EURUSD is falling again and it keeps getting worse and worse. The current quote for the instrument is 1.0978.
Capital markets are gripped by panic, which brings a rapidly increasing demand for liquidity. In this light, the USD is getting stronger being a “safe haven” asset.
Right now, financial panic is based on what is happening in the world and assumptions that consequences might be much more serious than it was expected before. Quarantine restrictions are crippling the tertiary industry and may actually destroy the services sector along with small enterprises. At the same time, a lot of currencies are depreciated, which is also not good. As a result, investors are switching to the USD.
Market players didn’t pay attention to the statistics from the USA published yesterday. The Retail Sales lost 0.5% m/m in February after adding 0.6% m/m the month before and against the expected reading of +0.2% m/m. The decline is directly connected with the coronavirus outbreak as it made consumers go shopping less often.
The Industrial Production in the USA showed +0.6% m/m in February after being -0.5% m/m in the previous month. The Capacity Utilization Rate went from 76.6% to 77.0% over the same period of time.
Slowly deteriorating numbers on the real estate market may be considered as the start of a slowdown. The NAHB Housing Market Index showed 72 points in March after being 74 points the month before.
However, the USD doesn’t pay attention to this, because right now there are things that are much more important.