The EUR/USD today established a bearish trend that was triggered by the release of the ZEW economic sentiment survey for Germany, which did not meet expectations. The currency pair was also affected by the stronger US dollar backed by the strong US Producer Prices for the month of February released by the Bureau of Labor Statistics.
The currency pair lost significant ground today as yesterday’s bearish trend extended to today, thereby, increasing the selling pressure on the currency pair.
The downward pressure on the euro increased after the ZEW economic sentiment survey for Germany indicated that the economic sentiment in Germany for the month of March was recorded at 12.8 against a market consensus of 13. The ZEW survey also revealed that the political uncertainty around the German economy is quite high, which is similar to the political uncertainty being witnessed in other EU countries.
The currency pair was also affected by the higher US Producer Prices for the month of February, which came in at an annualized rate of 2.2% and a monthly rate of 0.3%. The currency pair was also affected by the increasing buying pressure around the US dollar as markets anticipate a rate hike by the Federal Open Market Committee on Wednesday.
The currency pair’s future performance is likely to be affected by the results of the Dutch general election and the FOMC rate decision, both scheduled for tomorrow.
The EUR/USD pair was trading at 1.0638 as at 16:47 GMT having opened the day’s session trading at 1.0658. The EUR/JPY was trading at 121.89 having opened the day’s session trading at 122.38.
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