EUR/USD: Hits two-week low, downside exposed as markets push back ECB rate hike bets to end 2020

• EUR/USD is being pressured by weak economic data, growing evidence of a slowdown in the core (Germany). 
• The common currency hit two-week lows in Asia and could remain under pressure in Europe on fading prospects of an ECB rate hike in next 12 months. 

The EUR/USD pair hit two-week lows in Asia and could slide further towards the support at 1.1330-1.13 on fading prospects of ECB rate hike. 

The Euribor market now suggests the ECB's first full 25 basis point hike won't occur until the end of 2020, according to Reuters. Further, the deposit rate, currently at minus 0.4 percent, is not seen rising above zero until mid-2021. It is worth noting that a month ago, the futures market was pricing a rate rise in the third quarter of 2020. 

Markets have pushed back rate hike bets in response to growing evidence of an economic slowdown in core Eurozone economies. On Wednesday, German - the Eurozone's biggest economy and export powerhouse - reported the biggest drop in factory orders since 2012, triggering fears of recession. 

Earlier this week, German Ifo Institute reported its economic climate index for Eurozine at -11.1; the first negative reading since 2014. 

Put simply, the economic divergence between the US and Eurozone is widening in favor of the US dollar. Hence, the EUR could remain under pressure in the near-term. 

The downside could gather steam if the German industrial production for December misses estimates by a big margin, bolstering recession fears. The data is scheduled for release at 07:00 GMT. 

EUR/USD pivot points