- EUR/USD continues to draw bids on risk aversion.
- Markets are a sea of red on oil price sell-off and virus fears.
EUR/USD continues to find bids and gain altitude amid broad-based risk aversion in the financial markets.
The currency pair jumped to 1.1396 early Monday to hit the highest level since June 2019 and was last seen trading in green near 1.1380, having ended the last three straight weeks on a positive note.
The financial markets are a sea of red this Monday, with oil benchmarks reporting a 22 percent slide. Meanwhile, the futures on the S&P 500 are reporting a 4.5% drop and the US 10-year yield has dropped to record lows below 0.5%.
Saudi Arabia slashed its export oil prices over the weekend in what is likely to be the start of a price war aimed at Russia, according to The New York Times. Russia on Friday to join the Organization of the Petroleum Exporting Countries in a large production cut.
The sell-off in oil has bolstered the risk-off tone already prevalent in markets due to coronavirus fears. The virus continues to spread outside China, notably in Italy and South Korea, at a faster rate. As per Washington Post, some White House officials are worried that the number of confirmed cases in the US would double or more in the next 48 hours.
So, the anti-risk environment is likely to persist, keeping the EUR better bid. The common currency bottomed out below 1.08 on Feb. 20 and has rallied by over 500 pips ever since, establishing itself as a safe-haven currency.