The euro continues to remain under pressure from developments throughout the day. The currency is declining against the US dollar, British pound, Japanese yen, and Swiss franc. EUR/USD, which had generally been strong throughout the year, is seeing the strongest declines.
The euro struggled last month when the Nord Stream Pipeline was temporarily closed. Now, Russia confirmed that the pipeline would close again. The Eurozone is hopeful that the gas route will only be closed for 3-4 days, as has been advised by their Russian counterpart. Nonetheless, the news saw European gas prices rise and the Euro decline.
The currency pair which has remained in the spotlight, EUR/USD, has declined to below parity levels for the second time this year. The exchange rate is 0.9997, 40 pips lower than the weekly market open price. The lowest price the pair has witnessed this year is 0.9950. The current trend remains steady, with the price only experiencing one minor retracement throughout the day. Traders focus on the euro's reaction to the US market opening.
Another factor influencing the euro is the Purchase Manager Index data from the Eurozone, which is due to be confirmed tomorrow. The index is deemed to be a significant price driver.
Bitcoin
Bitcoin has declined by 1.22% against the US Dollar but is attempting to increase in value. It reached a low of -2.60% before retracing back up. However, traders' attention remains on the significant decline that occurred on Friday when Bitcoin declined by 9.27% within a single day. This was the biggest decline the asset had experienced since Jun. 18 this year.
Experts are not 100% sure why the asset saw a significant decline in price over a brief period. Several experts believe this price movement may have been triggered by a one-time asset sale by a large investor. Experts are also cautious of the deterioration of weaker economies that invest heavily in cryptocurrencies due to their unstable regional currency. According to economists, countries in Africa, Asia, and South America are at extremely high risk.
Crude Oil
The price of crude oil is attempting to form a higher price wave which would form an official bullish trend if traders follow Elliot Wave Theories. Yet, it has declined to $90.35 over the past 2 hours.
Oil prices are partially supported by a lower supply within the market and a lower number of barrels held by US commercial firms. However, at the same time, the global recession risk will significantly strain the prices, especially if employment is affected.
Over the past couple of hours, the former Treasury Secretary, Mr. Summers, has advised that the Federal Reserve needs to deliver a bleak picture of the global economy at this week’s symposium. According to Mr. Summers, the Federal Reserve needs to continue hiking interest rates until the economy sees a significantly lower inflation or the unemployment rate rises considerably. Many economists, like Mr. Summers, see longer-term high inflation as a bigger risk to the economy than higher interest rates.
The price of oil could be substantially pressured if economic statistics start to deteriorate or interest rates continue to increase. This is something that the market will be following throughout the Jackson Hole Symposium, which will take place on Thursday and Friday.