The euro traded lower against its major competitors today after CPI data from Germany was released at a lower than expected figures. The euro’s performance was also affected by the weakening of other currencies such as the US dollar and the British pound, which minimized its decline, but the currency later recovered.
The euro lost almost once cent against the dollar and also lost significant ground against the British pound. The currency later recovered during the North American session.
The euro’s decline was mainly triggered by the disappointing CPI data from Germany, which was reported at a yearly rate of 1.9% versus the expected yearly rate of 2.0%. The currency has also been trading lower based on the dovish outlook reported by the European Central Bank, which the bank insists on maintaining.
The euro’s decline was cushioned by the mixed data reported from the USA where personal income rose 0.3% on a monthly basis as opposed to the expected 0.4%. The euro was expected to recover its losses during the American session, which has already happened.
The euro’s performance might improve in the short-term as other countries start reporting the first quarter economic estimates. However, the ECB’s dovish policies will continue to drag the euro backwards until Mario Draghi, the ECB President, changes his narrative.
The EUR/USD currency pair was trading at 1.0697 as at 16:02 GMT having recovered during the North American session from a low of 1.0609. The EUR/GBP currency pair was trading at 0.8550 having also recovered during the American session from a daily low of 0.8487.
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