After breaking through the crucial 1.0350 level, which represented the lows of 2017 and year-to-date, negative momentum has also accelerated. Although there has not been a single issue that caused the dumping on July 5, the currency seems to be affected by a myriad of variables.
Russian gas exports to Europe decreased by 40% in June, contributing to the continued high cost of electricity in that region. The ECB’s Nagel remarks, which warned against employing monetary policy to reduce the risk premiums of governments in debt and also stated that an anti-fragmentation instrument can only be employed in exceptional circumstances, did nothing to help the Euro. Even though Nagel is not in the majority at the Bundesbank, the possibility of a weak Anti-Frag tool that eventually falls short of market expectations exists.
With minimal economic statistics coming out of the Eurozone this week—the ISM Non-Manufacturing PMI is expected Wednesday and the NFP report is scheduled for the end of the week—the euro will probably take its cues from US figures.