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The euro traded near 22-month lows on Tuesday as the war in Ukraine led to a pessimistic economic outlook for Europe, while currencies that had surged on a sharp increase in energy prices stalled after a weeks-long rally.
Russia’s invasion of Ukraine has boosted demand for assets seen as safer, with the dollar, the global reserve currency, rising nearly 3 percent in nearly two weeks as the crisis intensified.
The euro regained strength on Tuesday after falling for five sessions, but it is still near the low of $ 1.08060 that it hit on Monday, its lowest level since March 2020 when the Covid-19 pandemic ravaged Europe.
The data published by Eurostat showed on Tuesday that seasonally adjusted Gross Domestic Product (GDP) in the euro area expanded by 0.3% on a quarterly basis in the fourth quarter. This print came in line with the initial estimate and the market expectation. Compared with the same quarter of the previous year, GDP grew by 4.6%.
The US’s Goods and Services Trade Deficit rose to $89.7B in January according to the latest joint release from the Bureau of Economic Analysis and US Census Bureau. That was larger than the expected monthly trade deficit of $87.1B and up from December’s $82.0B deficit. The US Goods deficit came in at $108.9B, while the Services surplus was $19.2B.
Canada posted a trade surplus of C$2.62B in the month of January, the largest since 2008, a release from Statistics Canada showed on Tuesday. That was a larger surplus than the C$2.0B expected and marked a strong rebound from December’s surprise deficit of C$1.58B. Analysts said that, given recent commodity price gains, further upside in the country’s trade surplus is expected.
