EUR: Fresh Slump Against Pound Sterling and Dollar, Fresh Losses vs Aus and NZ Dollars Also Seen

The falls come following a recent bout of weakness, "positioning helped the euro climb above $1.34 last week given that negative bets have become a bit stretched," notes Joe Manimbo at Western Union in reference to the rally seen at the close of the previous week.

The rally did however prove to be lacking in fundamental backing, and following on from Tuesday's German ZEW Survey results the sellers have come out in force.

At the time of writing we see the following rates:

• The euro dollar exchange rate (EUR/USD) is 0.13 pct in the red having reached 1.3352.
• The euro to pound exchange rate (EUR/GBP) is 0.20 pct lower at 0.7936.
• The euro to Australian dollar rate (EUR/AUD) is 0.27 pct lower at 1.4385.
• The euro to NZ dollar (EUR/NZD) is 0.07 pct lower at 1.5842.

NB: All quotes here are from the wholesale market; your bank will charge a spread at their own disrection. An independent FX provider will seek to come as close to the market rate as possible, they are able to deliver up to 5% more currency in some instances. Please find out more.

Outlook for the euro sours as German confidence falls

The euro will take negative cues from this month's German investor confidence results.

"More worrying signs of weakness in Europe’s No. 1 economy had the euro deeper below $1.34 and within pips of recent November 2013 lows," says Joe Manimbo at Western Union.

German investors grew the least confident in 20 months in August as the influential ZEW survey tumbled to 8.6 from 27.1 in July. Markets had expected a still-sizeable decline to 18.2 in the latest period.

From a technical perspective the euro dollar rate continues its decline towards 1.3293.

"Longer-term the downtrend remains intact and we should eventually see $1.3293 and ultimately considerably lower levels over the coming months," says Phil Seaton at LS Trader.

US dollar rises as yields increase

The USD remains one of the favoured currencies at the present moment in global FX.

Driving USD sentiment is the bond market; the U.S. 10-year note rose above 2.4 percent from last week’s 14- month low below 2.35 percent.

This helped the dollar get the week started on a firmer footing.

"Key for the dollar’s fundamental makeup this week will be U.S. reports on the consumer and manufacturing. Outcomes that leave the world’s top economy in position for faster growth over the balance of the year could mean better exchange rates yet for American importers. The U.S. calendar gets under way Wednesday with retail sales forecast to rise 0.3 percent in July, slightly more than June’s 0.2 percent increase," says Manimbo.

From a technical perspective the Euro dollar rate continues its decline towards 1.3293.

"Longer-term the downtrend remains intact and we should eventually see $1.3293 and ultimately considerably lower levels over the coming months," says Phil Seaton at LS Trader.

UK market update

No news is good news has been the mantra of the markets today suggests one commentator.

"There has been a ceasefire in the war of the words between Brussels and Russia, while dealers have scurried from their foxholes and picked up cheap stocks after last week’s trail of destruction," says David Madden at IG.  

The tense standoff in Eastern Europe is far from over and traders are making the most of this brief period of stability.

Elsewhere, "Balfour Beatty has surprised traders with the early release of its disappointing figures and has also ruled out a merger with Carillion. The mining sector has extended its gains after positive corporate updates and solid metal prices. The IG binary bet on the Scottish referendum outcome now suggests an 85% chance of a ‘No’ vote," says Madden.