The euro has dropped to its lowest level against the US dollar since June 2017. The reason for this seems pretty straightforward. After running above potential last year, GDP growth has come down considerably in recent months and is now expected to remain tepid for the remainder of the year.
Partly as a result of this slowdown, bond yields have plummeted again throughout the Eurozone. In Germany, the yield on 10-year debt is hovering around or just below zero. The yield differential between the Eurozone and the US remains historically elevated, putting downward pressure on the single currency.
