Euro Declines Despite Positive German GDP and Eurozone CPI

The euro today declined against the US dollar despite the release of positive German Q4 GDP report, and also ignored the release of positive Eurozone inflation data. The euro extended its decline from the Asian session into the European session following the greenback’s recovery, which started during yesterday’s American session.

The EUR/USD currency pair was lost over 50 points to decline from an opening high of 1.2332 to a low of 1.2279 before retracing some of its losses.

The EUR/USD currency pair opened today’s session on a downtrend following the recovery in US dollar demand. Several releases by the Federal Statistical Office in the early European session provided a brief respite for the currency pair. The German government spending for Q4 2017 came in at 0.5%, which was higher than the expected 0.4% and could have been responsible for the pair’s brief rally. Other German prints such as private consumption, construction investment and domestic demand missed expectations. The release of the German Q4 GDP data also contributed to the pair’ brief rally as it was in-line with expectations.

The release of the Eurozone CPI data by Eurostat had minimal impact on the currency pair despite both prints meeting expectations. The headline CPI print came in at an annualized 1.3%, while the core CPI print came in at 1.0%.

The currency pair’s future performance is likely to be affected by investor sentiment and political events in both the Eurozone and the USA given the upcoming weekend.

The EUR/USD currency pair was trading at 1.2309 as at 15:33 GMT having recovered from a low of 1.2279. The EUR/JPY currency pair was trading at 131.33 having declined from a high of 131.85.

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