EUR/USD Exchange Rate Outlook: EUR/USD Slumps, Gives Up 1.3500 as Sentiment Sours

Meanwhile, EUR woes come amidst a fresh bout of Geopolitical nervousness, concerns that Russian economic sanctions will hurt the Eurozone economy are of particular relevance and must be watched when considering forex market decisions.

Euro Rate Today, Latest Quotations on Friday:

• The euro dollar exchange rate (EUR/USD) is 0.09 pct lower on a daily basis having reached 1.3451. The pair is well below this week's high point of 1.3549 and the trend appears to be lower.
• The euro pound exchange rate (EUR/GBP) is unchanged at 0.7927. This is shaping up to be a good week for the EUR as the GBP enters a period of softness.
• The euro to Aus dollar (EUR/AUD) is 0.16 pct higher at 1.4266.
• The euro to NZ dollar (EUR/NZD) is 1.42 pct higher at 1.5700 courtesy of Thursday's indication at the Bank of New Zealand that no further interest rate hikes are planned for NZ.

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"The dollar rose across the board with EUR/USD tumbling below the key 1.3500 level as the conflict in Ukraine is clearly starting to weigh on the pair.

"There was no specific news to move the pair, but as we noted recently the accumulation of geopolitical stress and the elevated level of tension between Russia and EU has cast a pall over investor sentiment in the region as trader fear that political conflict will result in a slowdown of economic activity," says Boris Schlossberg at BK Asset Management.

EUR/USD slipped to a low of 1.3480 before rebounding slightly as currency markets are becoming increasingly more wary of the economic conditions in the region.

"With demand in the Eurozone still very tepid any further geopolitical shocks could tip the periphery economies back into a recession which would likely weigh more on the unit," suggests Schlossberg.

The IMF predicts Germany’s economy to expand more than forecast this year due to strong domestic demand and low unemployment, a clear positive for the shared currency.

The Fund did however warn that escalating tensions with Moscow could hit the largest European economy as it has strong trade ties with Russian companies.

UK's sterling: Volatility ahead?

With a particularly quiet day for economic data, marginal trading ranges were seen across the major pairs.

UK house prices were shown by the Rightmove survey to have fallen 0.8% following a 0.1% increase in June.

GBPEUR saw minimal movement from opening at 1.2621 to close at 1.2610. The pair opened higher this morning at 1.2633.

GBPUSD charts mirrored the GBPEUR, falling towards the end of the session having opened at 1.7084 to close at 1.7060. The pair has edged higher this morning at 1.7077.

The latter part of the week could bring volatility through MPC Meeting Minutes from the BoE on Wednesday . On Thursday we have UK Retail Sales and finally we finish the week with the first estimate of UK GDP for Q2 which will be heavily awaited by market participants.