Euro Drops Further Driven by Political Uncertainty and Weak Data

The euro today fell to new lows last seen in mid-August against the US dollar as the political uncertainty in key eurozone countries such as Germany and Italy weighed on the single currency. The release of mixed macro data from the euro area combined with the strong employment data from the USA also added to the selling pressure on the euro.
The EUR/USD currency pair today dropped from a high of 1.1360 to a low of 1.1307 as sellers drove the pair lower.
The currency pair was in a tight range during the Asian session before rallying slightly and then heading lower. The release of the German retail sales data for September by the Federal Statistical Office had a muted impact on the currency pair despite missing expectations. The print came in at 0.1% versus the expected 0.5%, which translated into an annualized decline of 2.6%. The pair headed lower before the release of the eurozone unemployment rate, which met expectations at 8.1%. The eurozone headline and core CPI prints for October released by Eurostat were also in line with expectations by coming in at an annualized 2.2% and 1.1% respectively.
The release of the US ADP employment change data, which beat expectations also drove the pair lower. The political uncertainty in German regarding Angela Merkel’s impending departure and Italy’s standoff with the European Union also weighed heavily on the pair.
The currency pair’s future performance is likely to be affected by European political events and this weeek’s US macro releases.
The EUR/USD currency pair was trading at 1.1331 as at 15:38 GMT having recovered from a low of 1.1307. The EUR/JPY currency pair was trading at 128.17 having dropped from a high of 128.53.

If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *