The EUR/USD pair closed at 1.1931 after placing a high of 1.1947 and a low of 1.1871. After dropping for two consecutive sessions, EUR/USD rose on Monday and recovered some of its previous losses despite negative developments in the region surrounding the coronavirus situation. Europe is continuously struggling with the coronavirus after more than a year of the outbreak as the third wave of infections has prompted new lockdown measures in many European nations. Simultaneously, the bloc’s vaccination rollout has also been sluggish due to supply lags and manufacturing issues. This has pushed the European Union leaders to gather around in a meeting this week to discuss the introduction of a possible vaccine export ban once again.

Along with France, Poland, Italy, and Ukraine, Germany – largest European economy, was also set to extend its lockdown into April as the third wave of the virus has hit the nations hard. This came in as the European nations were far behind the US and the UK in their vaccination campaign. This frustration has led to protests, and now European leaders are deciding to block vaccine exports. Furthermore, the Turkish lira dropped as much as 15% after President Recep Tayyip Erdogan dismissed the country’s central bank governor over the weekend. Governor Naci Agbal has been instrumental in pulling the lira back from historic lows. He was appointed in November and had been raising interest rates to fight against an inflation rate running above 15%.

On Saturday, President Erdogan sacked the governor that shocked both local and foreign investors as they have been praising Turkey’s central bank’s monetary policy. Despite all these negative developments in the region, the EUR/USD pair managed to place gains on Monday amid the decline in the US treasury yields. The Benchmark US Treasury yields on the 10-year note fell by 4 basis points on Monday that was the most significant drop in yields this week that ultimately weighed on the US and supported the upward trend in the currency pair EUR/USD. On the data front, at 14:00 GMT, the Current Account Balance in February from the Eurozone showed a surplus of 30.5B against the expected 34.5B and weighed on the single currency Euro that capped further gains in EUR/USD.From the US side, at 19:00 GMT, the Existing Home Sales from February dropped to 6.22M against the forecast 6.55M and weighed on the US dollar that ultimately pushed EUR/USD prices on Monday. On the other hand, US Fed Chairman Jerome Powell and the US Treasury Secretary Janet Yellen are expected to appear before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday. They will discuss the US economy’s health and the importance of the fiscal and monetary stimulus in the recovery from the pandemic.

If Chairman Jerome Powell continues to dismiss the rising rates on the US Debt, it will increase the dollar’s strength that could hurt the gains of the EUR/USD pair. Meanwhile, on Monday, Fed Chair Jerome Powell also called BITCOIN a substitute for GOLD rather than for the US dollar due to its unstable nature. He said the cryptocurrencies were not backed by anything and were highly volatile and sensitive to speculation. Hence, they cannot be introduced as a competitor of the US dollar. Powell’s comments also added strength to the US dollar that capped further gains in the EUR/USD pair on Monday.