EUR/USD to drop under 1.08 on new escalation stage in Ukraine – Commerzbank

EUR/USD extended its slide toward 1.08 during the Asian trading hours but managed to stage a rebound toward 1.0850. Economists at Commerzbank believe that the pair could slide below 1.08 on renewed tensions in Ukraine. 

EUR/USD between escalation and recession fears

“EUR/USD is caught between escalation fears, which weigh on the euro, and recession fears, which can put downward pressure on the dollar.”

“Since escalation fears in the Ukraine conflict are prevailing again right now, which are more real and ‘closer’ in time for the market, the euro is under greater pressure again. 

“If the signs that there could be a new escalation stage really intensify, it is quite possible that EUR/USD slips below the 1.08 mark.”