EUR/USD Declines as American Markets Remain Closed

The EUR/USD currency pair today declined for the second consecutive session in a global market characterized by low volatility given that US markets remain closed as the country celebrated  Presidents’ Day. The US markets were not the only ones closed, as Chinese markets also remain closed due to the ongoing Chinese New Year celebrations.

The EUR/USD currency pair declined by over 60 points from a high of 1.2434 to hit a low of 1.2369 in the mid-European session.

The currency pair’s decline was largely driven by negative investor sentiment towards the single currency given the lack of major economic releases from the European docket. The release of the Eurozone current account data for December by Eurostat had a positive impact on the currency pair as it was higher than the previous figure. The Eurozone construction output for December was also much higher than the previous print and contributed to the pair’s brief rally.

The thin trading volumes attributed to the closure of Chinese and American markets directly affected the currency pair’s movements. There was minimal demand for the US dollar as investors exercised caution as they wait for key fundamental drivers on Tuesday, Wednesday and Thursday.

The currency pair’s future performance is likely to be affected by tomorrow’s German ZEW survey, Wednesday’s FOMC minutes and Thursday’s ECB minutes.

The EUR/USD currency pair was trading at 1.2399 as at 16:48 GMT having recovered from a daily low of 1.2369. The EUR/JPY currency pair was trading at 132.16 having rallied from a low of 131.86.

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