The EUR/USD currency pair today traded lower following a resurgence in US dollar demand during the European and early American sessions. The currency pair rallied higher during the Asian session as investors bought the low-yielding euro after European stocks joined the global equities sell-off.
The EUR/USD currency pair lost over 120 points to decline from an intra-day high of 1.2435 to a low of 1.2312 at the time of writing.
The main driver behind the currency pair’s movement today was the action in European and US equity markets. The euro’s rally during the Asian session was largely triggered by investor demand for the less risky euro as European stocks joined the global sell-off. The release of the upbeat German factory orders for December by the Federal Statistical Office also served to accelerate the pair’s initial rally. The factory orders were recorded at 7.2% on an annualized basis, as opposed to the expected 3.1% print. The positive Markit Germany Construction PMI, which came in at 59.8, also contributed to the pair’s initial rally.
The Markit Germany retail PMI also contributed to the pair’s performance in the early European session. The rebound in US dollar demand was the main driver behind the pair’s decline as it increased the selling pressure on the euro. The wider-than-expected US trade deficit released by the Census Bureau could not halt the pair’s downtrend.
The currency pair’s short-term performance is likely to be affected by the action in the US and European equity markets.
The EUR/USD currency pair was trading at 1.2331 as at 15:55 GMT having dropped from a high of 1.2435. The EUR/JPY currency pair was trading at 134.89 having declined from a daily high of 135.78.
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