EUR / USD falls to a new annual low due to the immense strength of the dollar, GBP / USD also on the edge of the cliff

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EUR / USD has hit a new low at 1.1656, since the dollar has finished its rest. The USD has benefited from increased US Treasury yields. Benchmark 10-year bond yields hit 1.56% on Tuesday and the US dollar continues to rise despite some stability in the bond market.

The concerns about the debt ceiling and rising energy prices they are also weighing on the sentiment. US Treasury Secretary Janet Yellen warned Congress that if the debt ceiling is not raised, The United States risks defaulting on its debt on October 18. Lawmakers are fighting over the debt and so are President Joe Biden’s vast spending plans.

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China is dealing with power outages in the industrial northeast that threaten to derail production and global recovery. The safe-haven dollar benefits from the moves.

The common currency has not benefited from the higher-than-expected Spanish CPI consumer price index. Inflation reached 4% in the eurozone’s fourth-largest economy and has probably advanced more than estimated elsewhere.

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Below 1.1660, EUR / USD is at the lowest level since November 2020. The next significant line is 1.1610, a double bottom from the end of last year. Below that line, some support can be found at 1.1550. Looking up, 1.1680, 1.1720 and 1.1725 limit to par.

EUR / USD 4-hour chart:

On the other hand, the GBP / USD is also under pressure, trading near 1.35 after already plummeting to its lowest since January on Tuesday.. The UK is suffering from a shortage at gas stations.

Federal Reserve Chairman Jerome Powell, European Central Bank President Christine Lagarde, and Bank of England Governor Andrew Bailey will participate in a panel later on Wednesday.

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