The euro is at the lows of the day and testing the lows of the week. Credit Agricole CIB Research flags 4 current drivers for EUR/USD .
"There are four key risks for EUR/USD at present: (1) political risks related to the Italian and French presidential elections; (2) the stand-off with Russia over Ukraine that is fuelling energy prices; together with (3) the pandemic, which adds to the stagflationary risks in the Eurozone while increasing its dependency on US energy imports; and (4) the hawkish Fed that is boosting the rate appeal of the USD vs the low-yielding EUR," CACIB notes.
"The above risks should keep EUR/USD grounded in H122," CACIB adds.
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