The euro today weakened against the US dollar as trade tensions between the US and China boosted the greenback. The EUR/USD currency pair was further dragged lower by the positive investor sentiment towards the greenback following the mixed non-farm payroll data released on Friday.
The EUR/USD currency pair today dropped from a high of 1.1570 to a low of 1.1532 and was approaching 2018 lows due to the bearish investor sentiment towards the euro.
The currency pair had a muted reaction to the release of the German factory orders for June by the Federal Statistical Office in the early European session. The factory orders contracted by 4.0% in June, which was way higher than the expected 0.5% contraction. This translated into an annualized 0.8% contraction versus the consensus estimate of a 3.4% expansion. The release of the Markit Germany Construction PMI, which came in at 50 as compared to the previous figure of 53, also drove the pair lower. The release of the Eurozone Sentix investor confidence index for August boosted the pair slightly by coming in at 3-month highs of 14.7 versus the expected 13.5.
Furthermore, the escalating trade tensions between China and the USA have boosted the greenback even as China has devalued the yuan. The positive investor sentiment towards the greenback following the mixed NFP report also drove the pair lower.
The currency pair’s future performance is likely to be affected by geopolitical events and tomorrow’s German trade balance data.
The EUR/USD currency pair was trading at 1.1543 as at 13:52 GMT having dropped from a daily high of 1.1570. The EUR/JPY currency pair was trading at 128.64 having declined from a high of 128.76.
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