Weakness in EUR is going on but it seems to have stopped. On a technical basis the first resistance on a rise is 1.0601 and first support is 1.0487 Level.
The dollar index firmed up above the 103 level on Monday, holding near a 19-year high hit last week, as traders prepared for a key Federal Reserve meeting later this week where it is widely expected to raise interest rates by a hefty 50 basis points. Fed policymakers look set to deliver a series of aggressive rate hikes at least until the summer to deal with rapid inflation and surging labor costs, even as two reports on Friday showed tentative signs both may be peaking. Weaker-than-expected quarterly US growth data on Thursday also proved little obstacle to the dollar’s rise, and investors hardly adjusted their near-term interest rate bets. Moreover, fears of an economic slowdown in Europe and China driven by the Ukraine war and Covid lockdowns, respectively, spurred safe haven flows into the dollar.
Europe’s major stock indices traded lower on Monday, with France’s CAC 40 erasing 1% and leading losses, while the pan-European Stoxx 600 and the German DAX fell 0.8% each, amid thin trading volumes as markets were closed in the UK and China for holidays. Market sentiment was dominated by growth woes, after PMI readings of China’s manufacturing and services confirmed a worsening contraction in both sectors over the weekend, reflecting stringent lockdowns and other restrictions in major cities. In Europe, confidence among Swiss consumers slumped to its lowest since Q2 2020, while retail sales in Germany unexpectedly declined in March. Investors are now gearing up for major central bank meetings, namely the US Fed on Wednesday and the Bank of England the day after, with a 50 basis point rate hike widely expected in the US. Later in the session, attention will center around a slew of confidence indicators and PMI releases.