The EURUSD exchange rate has bounced from a recent sharp slowdown despite fears over gas prices.
EURUSD – Daily Chart
The price of EURUSD has bounced back above the 1.04875 with resistance ahead at the 1.06 level. That will be an obstacle to further gains with 1.07 the next target.
Everything seems to be going wrong for Europe with a struggling economy, Ukraine tensions, French government stress and now energy fears.
Growing tensions in Ukraine have contributed to a surge of around 45% this year. While levels are still well below 2022 records, but are high enough to risk adding to a cost-of-living crisis for households and putting further pressure on struggling manufacturers.
Gas storage is the country’s lifeline during the coldest periods but inventories this year are declining fast after low temperatures added to demand for heating and a wind drought required more energy for power generation.
Over two years since the onset of the Russia Ukraine war, Europe is struggling to secure its energy system. The tighter market highlights the continent’s challenge to wean itself off Russian fossil fuels. The situation looks like it will get worse with gas deliveries that helped fill reserves in 2024 likely unavailable next year.
“We still have problems with gas supply,’’ said Markus Krebber, chief executive officer of RWE AG on Friday. “If we really want to be independent of Russian gas we need to have more import capacity and we will probably see this again this winter because gas storage facilities are emptying quite quickly as we have a cold start to the winter.”
Manufacturing data will come in for Europe at around 5pm HKT on Monday.
