Big speculative flows and not concerns about a worsening economic outlook explain the euro's slide to a five-year low below $1.05 this week, a study by BNP Paribas showed.
BNP Paribas strategists said the euro's fall was driven primarily by large speculative flows with volumes centered around so-called "daily fixings" for currencies.
The global $6.6 trillion a day currency markets operate 24 hours a day, five days a week, with no equities-style closing price to use as a reference point. Therefore, many investors use a handful of fixes as the daily benchmark rate for their currency trades to mark their portfolios. The euro fell on Thursday to $1.0469, its lowest level since January 2017 , with Russia's move to cut off gas supplies to Bulgaria and Poland dealing the latest blow to a struggling currency.