Political concerns and adopted monetary policies continues to weigh heavily on the euroPosted on Monday, April 3 2017 at 6:52 pm GMT+0000
The euro fell sharply last week, recording a two-week low of 1.0650.
Despite its weak attempt to recover today, the euro remains under pressure due to several factors – political developments, weak growth rates and relatively low interest rates.
A survey of 80 central bank reserve managers yesterday revealed their readiness to replace the euro with other currencies due to the mentioned factors, while the most important of these factors remains the impact of the rise of anti-European Union parties.
In the longer term (up to three years), some of those managers favored even the sterling over the euro despite rising Brexit-related concerns, what reflects clear signs of instability in the European political situation and increases concerns regarding the persistence of the Union itself.
In the near term, the Euro is testing support area at 1.0650, from which a minor correction can be initiated. That recovery may remain limited below the 1.0740 level, should it fail to hold, the 1.0820 would act as the next important resistance.