EUR/USD is trading near 1.0250, recovering ground as the US dollar meets fresh supply amid a sudden positive shift in risk sentiment.
The EUR/USD pair struggled to capitalize on Friday’s goodish rebound from a multi-day low. This had the pair depressed below the 1.0200 mark through the early European session on Monday.
The shared currency was weighed down by concerns that a halt of gas flows from Russia could trigger an economic crisis in the Eurozone. It is worth recalling that Russian President Vladimir Putin warned last week that supplies sent via the biggest pipeline to Europe could be reduced further and might even stop.
Adding to this, the European Union told member states to cut gas usage by 15% until March as an emergency step. Adding to this, the disappointing release of the flash Eurozone PMIs for July revived recession fears.
On the other hand, the growing risk of a global economic downturn offered some support to the safe-haven US dollar. Apart from this, an uptick in the US Treasury bond yields also underpinned the greenback, which, in turn, was seen as another factor that acted as a headwind for the EUR/USD pair.