EUR/CHF down 42 pips today
A second day of steady selling has pushed EUR/CHF below last week's low and down to the worst levels since March 2.
This pair is a great barometer of the European reopening trade but the latest stumble with the AstraZeneca vaccine is not being received well. We also have Italy in a third wave and poor signs from many other nearby countries on virus growth.
Eventually there will be a worldwide reopening trade but for now the timing matters. Moreover, the trajectory for the eurozone coming out of the financial crisis was poor and it's beginning to look like a repeat. There simply isn't the fiscal capacity to jumpstart the economy like the US and others are doing.
Based on everything the experts are saying, the risk for the AstraZeneca vaccine is low but all the bad headlines mean take-up will be slower. Again, that's only a timing issue so it's not going to be a long-term problem for the euro. It's just a matter of whether this catches support at the March low of 1.0955 or needs to track all the way back to 1.0900 and retest the Dec highs.
