FXStreet (Bali) - The EUR/USD is trading under heavy pressure in early Asian session, presently a few pips below 1.07, as participants continue to flee to safety following the despicable attacks in Paris.
Global stocks are set for a sell-off this Monday, and while the SP500 futures are only down by 0.5%, with US Treasuries up 11 ticks and gold posting gains of just over 0.5%, where the pressure has been felt the most so far is in the Euro, now breaking the 1.07 handle.
The reasoning behind the ongoing pressure in the Euro, despite perceived as a funding currency which should perform well amid risk-off conditions, is the fact that market now interpret the attacks in Paris as the last straw to make QE extension + rate cut by the ECB pretty much a done deal. EU growth is set to be badly hit by the events unfolding in Paris, as lack of consumer confidence/spending should result in even thinner prospects of EU inflation recovery.
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