Will the euro remain weak amid the protracted situation in Ukraine?

Will the euro remain weak amid the protracted situation in Ukraine?

06.04.2022

Yesterday, the U.S. dollar gained ground against the euro, with the EUR/USD pair falling by about 100 pips from 1.098 to 1.088. The decline has continued in line with the 20-period moving average on the hourly chart. Yesterday, Lael Brainard, the incoming vice chair of the Federal Reserve and known for her dovish stance, stated that “rapid quantitative tightening (QT) will be necessary at next month’s meeting,” which led to a rise in the U.S. dollar on expectations of interest rate hikes.

Amid reports of civilian casualties in Ukraine, European currencies faced resistance, and while other yen crosses gained momentum and rose, the EUR/JPY pair rose by only 80 pips. On the 4-hour chart, the EUR/JPY continues to form lower highs and lower lows, and no reversal signals have yet appeared. We need to closely monitor whether the downtrend will continue.

Today’s schedule includes the German Manufacturing PMI at 15:00 CET, the UK Construction PMI at 17:30 CET, the Eurozone Producer Price Index at 18:00 CET, and the US MBA Mortgage Applications Index at 20:00 CET. Once US trading hours begin, the schedule features remarks by Harker, President of the Philadelphia Fed, at 22:30 CET,remarks by Harker, President of the Federal Reserve Bank of Philadelphia, at 22:30 as we enter U.S. trading hours, the Canadian Ivey PMI at 23:00, remarks by U.S. Treasury Secretary Yellen at 23:00, U.S. weekly crude oil inventories at 23:30, and the release of the U.S. FOMC minutes at 07:00. We will keep a close eye on the euro’s movements while paying attention to key figures’ remarks from European to U.S. trading hours.