The Euro (EUR) consolidates losses against the US Dollar (USD) on Monday, trading at 1.1515 at the time of writing, following a 0.75% sell-off on Friday.
A mix of higher Oil prices, as tensions in the Middle East simmer, growing hopes of Federal Reserve (Fed) rate hikes, and downbeat Eurozone data has created a perfect storm for the common currency at the week’s opening
The Eurozone Sentix Investors’ Confidence Index improved to -13.4 in June from -16.4 in May, but remains at deeply negative levels, hinting at a dismal investors’ mood and below the levels around zero, seen before the US-Israel attack on Iran and the ensuing blockade of the Strait of Hormuz. Earlier on the day, German Industrial Orders dropped 3.8% in April, more than three times the 1.2% drop anticipated by the market consensus. Beyond that, March figures have been revised down to a 4.5% increase from the previous 5.0% estimate.
Higher Oil prices add pressure on the Euro In the geopolitical domain, Iran-backed Houthi Militias confirmed attacks on Israel, after Tel Aviv announced that they targeted military sites in Iran, in retaliation for a new barrage of missiles launched towards northern Israel. Iranian authorities have threatened US bases in Gulf countries in the most serious escalation of the hostilities since Washington and Tehran signed a fragile ceasefire in mid-April. The escalating tensions have sent Oil prices nearly $5 higher, as the barrel of Brent Crude rises to $96.37 at the time of writing, from Friday’s close of $92.