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Forex Today: EUR/USD Plummets to 2002 Low

on July 06, 2022
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Risk-off sentiment continues to grow as the USD makes strong gains while the yield curve inverts again.

Yesterday saw strongly above-average price movement in the Forex market, with the US Dollar Index powering to a new 2-year high, notably gaining against risky currencies, especially the Euro and the British Pound. It is likely we will see more downwards price movement in the EUR/USD and GPB/USD currency pairs over the coming days, after the EUR/USD reached a 19-year low yesterday below $1.0250. Some analysts see EUR/USD reaching parity for the first time since the 1990s.The British Pound was a major loser in the currency market yesterday and was possibly affected by the resignation of two key cabinet ministers in the UK government as the Prime Minister Boris Johnson struggles to secure enough support to maintain his leadership.


Today will see the release of the most recent FOMC meeting minutes. This will be closely watched and any surprises in the notes can potentially move all markets, especially the US Dollar. There will also be a release of JOLTS job openings data in the US.The Reserve Bank of Australia hiked rates yesterday by 0.50% to 1.35%, which was widely expected and had little effect upon the value of the AUD.The US treasury yield curve has inverted again, for the third time in recent weeks, as the 2-year yield overtakes the 10-year yield. Such a yield curve inversion is traditionally taken as a sign of recession.The two major cryptocurrencies, BTC/USD and Ethereum avoided major bearish breakdowns which seemed imminent Monday. Both cryptocurrencies have risen firmly, and their prices continue to hold up. However, if we later see Bitcoin get established below $18,500 and Ethereum below $997, further sharp falls will be likely to happen.Commodity markets continue to fall.Daily new coronavirus cases globally rose again last week, against the long-term trend. It may be that the omicron subvariant BA5 will cause another significant wave.It is estimated that 66.7% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.0% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger. Total confirmed new coronavirus cases worldwide stand at over 556.4 million with an average case fatality rate of 1.14%. The rate of new coronavirus infections appears to now be significantly increasing in Bangladesh, Belgium, Bolivia, Israel, Lebanon, Pakistan, Switzerland, Albania, Austria, Cyprus, France, Germany, Greece, Guatemala, Haiti, Iraq, Italy, Luxembourg, Malta, Mexico, Morocco, Singapore, and the UAE.

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