The EUR/USD pair closed at 1.1812 after placing a high of 1.1854 and a low of 1.1809. EUR/USD extended its losses and fell to its lowest since 23rd November 2020 amid the third wave of coronavirus that hit hard the European countries. Despite stronger than expected PMI economic data from Europe, the single currency Euro failed to post gains on Wednesday and dropped to its four months’ lowest level. This downfall in Euro was caused by the third wave of coronavirus in the region that threatened the bloc’s economic outlook.

European countries have extended their lockdown restrictions as new variants of the coronavirus have spread across the region. German chancellor Angela Merkel has also extended the lockdown till April due to the country’s rising number of infections. All these negative developments and the lagging supply of vaccines have weakened the European Union’s outlook compared to the US and UK. This has been weighing heavily on the single currency Euro that dragged the EUR/USD pair prices down on Wednesday.

On the data front, at 13:15 GMT, the French Flash Services PMI raised in March to 47.8 against the expected 45.5 and supported the single currency Euro and capped further losses in the pair. The French Flash Manufacturing PMI also raised to 58.8 against the expected 56.4 and supported Euro and limited the losses in EUR/USD. At 13:30 GMT, the German Flash Manufacturing PMI also advanced to 66.6 against the forecasted 60.4 and supported the single currency Euro and capped further losses. The German Flash Services PMI also raised to 50.8 against the projected 46.4 and supported Euro. At 14:00 GMT, the Flash Manufacturing PMI from the whole bloc raised to 62.4 against the forecasted 57.5 and supported Euro and capped further downside in EUR/USD. The Flash Services PMI from the bloc also raised to 48.8 against the projected 46.1 and supported Euro. At 19:28 GMT, the Consumer Confidence in March came in as -11 against the projected -15 and supported the single currency Euro and failed to reverse the pair’s downside momentum.

Furthermore, according to the European Central Bank, Christine Lagarde, the short-term economic outlook for the Eurozone economy was highly uncertain due to the slow vaccination rollout across the region. She added that the vaccine campaigns in Europe were far behind the US and the UK, and the cases of infections were also rising in the region’s main countries that have prompted new and extended lockdown restrictions. Her comments were enough to weigh on the single currency Euro and add further losses in the EUR/USD pair.

Meanwhile, on Wednesday, Germany’s benchmark 10-year bond yields fell to a five–week lowest level due to the growing signs of unease over the economic outlook of the Eurozone amid tighter and extended restrictions to contain the spread of the third wave of coronavirus. The bond yields fell by 2-3 basis points after investors turned to safe-haven assets and the riskier assets like EUR/USD suffered on Wednesday.