TheÂ euro today declined significantly against theÂ US dollar even asÂ trade tensions between theÂ USA andÂ China escalated increasing demand forÂ theÂ greenback. TheÂ EUR/USD currency pair declined further inÂ theÂ early European session following dovish comments byÂ theÂ European Central Bank President regarding theÂ timing ofÂ theÂ bank’s first interest rate hike.
TheÂ EUR/USD currency pair today declined from aÂ high ofÂ 1.1645 toÂ aÂ low ofÂ 1.1534 inÂ theÂ early American session asÂ theÂ US dollar gained against theÂ euro.
TheÂ currency pair headed lower early inÂ today’s session after it emerged that President Donald Trump‘s administration had imposed 25% tariffs onÂ $50 billion ofÂ Chinese imports. TheÂ Chinese government retaliated with tariffs onÂ high-value American imports andÂ suspended all trade agreements with theÂ Trump administration. TheÂ euro’s decline was further triggered byÂ declining German 10-year bund yields, which hit 3-week lows ofÂ 0.350% losing about 5 bps. TheÂ currency pair’s decline was mainly due toÂ theÂ risk-off sentiment as US-China trade tensions also affected European equities.
TheÂ pair’s decline was further accelerated byÂ Mario Draghi‘s dovish comments regarding future interest rate hikes asÂ he insisted onÂ theÂ need forÂ significant monetary accommodation withinÂ theÂ Eurozone. He also stated that uncertainty regarding theÂ regions growth outlook had recently increased.
TheÂ currency pair’s future performance is likely toÂ be affected byÂ theÂ developing US-China trade fights, which are likely toÂ escalate inÂ theÂ near future.
TheÂ EUR/USD currency pair was trading atÂ 1.1558 asÂ atÂ 13:08 GMT having declined from aÂ high ofÂ 1.1645. TheÂ EUR/JPY currency pair was trading atÂ 127.01 having dropped from aÂ high ofÂ 128.23.
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