EUR continues the slide before ECB’s meeting, investors getting worried on China’s growing debt risks

EURUSD touched a fresh three-month trough at $1.1755 before it slightly rebounded to $1.1780 during earlier sessions. Tomorrow we will have ECB’s meeting, and a dovish tone is expected based on previous comments from the president. Recently, ECB announced a new strategy that allows the bank to tolerate inflation above 2%, and this has been considered as a signal to further extend its loose monetary policy.

In China, as the growth slows down, officials are busy working on balancing the debt risks. In the first half of 2021, defaulted corporate bonds have amounted to 62.59 billion Yuan (~$9.68 billion), which is the highest since 2014 according to Fitch Ratings. National debt level has also risen to four times the GDP.