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The EUR/USD pair closed at 1.1926 after placing a high of 1.1968 and a low of 1.1911. The pair extended its losses for the second consecutive session on Monday despite the US dollar’s weakness ahead of the Federal Reserve meeting. EUR/USD lost grounds for the second day on Monday. The sentiment among investors continued to favor the US dollar against the Euro. The economic rebound in the euro area remained eclipsed by the better show-off predicted for the US economy, due to the poor development of the vaccine campaign in the old continent against the prospects of all the US adults getting vaccines by July.

The European bond markets also showed declining yields as the German 10-year yields dropped more than 8% and reached -0.325% on Monday, which ultimately weighed on the single currency Euro and added losses in the EUR/USD pair. On the data front, at 12:00 GMT, the German Wholesale Price Index rose to 1.4% against the expected 0.7% and supported Euro that capped further losses. At 17:30 GMT, the Empire State Manufacturing Index from the US surged to 17.4 against the forecasted 14.6 and supported the US dollar and added further losses in the pair.

On Monday, the Eurogroup members agreed to continue with a supportive budgetary stance throughout the rest of 2021 and into 2022 as well. The Eurogroup said that this would help ensure a smoother path to economic recovery. In a joint statement, the 19 member countries said they were united in an approach to continue to protect the bloc’s economy by deploying the necessary level of financial support until the health crisis was over and the recovery was firmly underway. The President of the Eurogroup, Paschal Donohoe, said that the joint actions so far have cushioned the impact of the coronavirus and with the rollout of the vaccines, the light at the end of the tunnel can now be seen. However, the uncertainty levels remained elevated that require a supportive and agile response from the policy.

Furthermore, the Euro currency was also under pressure on Monday after the European Central Bank announced that in the week ended on March 12, the central bank purchased about 19.303 billion Euros of assets as a part of its quantitative easing program in comparison of the 17.068 billion euros in the previous week. Nevertheless, the Executive Board of the ECB member, Isabel Schnabel, said that extrapolation from the weekly Pandemic Emergency Purchase Programme (PEPP) data to overall monthly data could lead to misleading conclusions.

On the other hand, the US dollar Index was strong near 91.80 level during the first half of the day, but as the day passed and the time for the Fed meeting for March came closer, the pressure surrounding the greenback started to increase. The traders are awaiting Jerome Powell’s comments that will be released after the meeting of two days, Tuesday and Wednesday.