Shock waves hit the global markets yesterday as the European Central Bank (ECB) revealed that it expects losses of Euro-Zone banks to reach $283 billion by the end of next year. This was one of the main factors that led to a bearish EUR throughout yesterday's trading. Additionally, weak U.S. data led traders to ditch the EUR for the safe-haven USD. Additionally, German Chancellor Angela Merkel received criticism yesterday due to Germany's tight fiscal policy. Opponents in Germany point out that she should be more flexible, and follow her British and American counterparts.
The EUR plummeted by over 150 pips vs. the USD to close at 1.3793. The news from the U.S. also helped global stock markets plummet, further helping push down the EUR/USD exchange rate. The EUR/GBP rate finished lower on Monday by 30 pips at the 0.8487 level. This marks further bearishness in the pair as the British economy has faired far better than the troublesome Euro-Zone economy in recent months. Against the JPY, the EUR tumbled a massive 350 pips to close at 133.85. This comes about as the economic uncertainty led the JPY's safe-haven status to become dominant again.
Today, there are plenty of economic data releases that are likely to greatly affect EUR trading. Amongst these are the German ZEW Economic Sentiment at 9:00 GMT, and the publication of Britain's CPI (Consumer Price Index) at 8:30 GMT. It is also advisable to follow statements coming out of the European Central Bank throughout the day. In addition, it is advisable to pay attention to the economic news from the US., as the EUR/USD rate will be greatly affected upon the release of this data.