EUR/USD has almost reached parity. July’s ZEW index due today is likely to illustrate to everyone just how heavily analysts have been gripped by fears for the future. The pair could slide below 1.00 following the data, economists at Commerzbank report.

It makes sense to avoid the euro for now

“We assume that the ZEW index might drop to -45. In principle not good news for the euro, and it is likely to remain under depreciation pressure while it is unclear whether Nord Stream 1 will provide gas again by the end of July.” 

“As the risk of a massive energy crisis is higher than ever at present it makes sense to avoid the euro for now.”

“Parity in EUR/USD is so close that the ZEW index will be enough of a trigger to test it this morning. Or a renewed slide in the European stock markets. That it will come is clear to me. I fear that once this dam is broken, the euro could settle below that level for the time being, until we (hopefully) know at the end of next week whether the gas is flowing again.”