EUR/USD Sinks to New Lows Despite Positive Eurozone Data

The EUR/USD currency pair today declined to new lows despite the release of positive Eurozone data such as the German unemployment change data. The release of positive US macro data including the positive core personal consumption expenditure data  also contributed to the pair’s decline.

The currency pair lost over 80 points at the height of its decline, to mark the third consecutive session where the pair has posted losses.

The EUR/USD’s decline was triggered by a news report from Reuters suggesting that policymakers at the European Central Bank were concerned about the euro’s recent strength. Investors interpreted this news as a sign that the ECB might not commence its quantitative easing tapering program any time soon. The release of the positive Eurozone CPI data by Eurostat could not boost the single currency. The CPI estimate came in at 1.5% beating the market expectation of a 1.4% increase on an annualized basis.

The US dollar’s ongoing recovery also contributed to the pair’s decline. The US Dollar Index, which tracks the greenback’s performance against a basket of its peers, hit a new high of 93.34. The positive US initial jobless claims released by the Department of Labor and PCE data released by the Bureau of Economic Analysis also boosted the greenback.

The currency pair’s future performance is likely to be affected by the release of the Italian GDP data and the US non-farm payrolls, both scheduled for tomorrow.

The EUR/USD currency pair was trading at 1.1856 as at 13:47 GMT having dropped from a high of 1.1906. The EUR/JPY pair was trading at 130.86 having declined from a high of 131.57 earlier today.

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