The euro today fell significantly against the US dollar following the release of weak German GDP growth data in the early European session. The single currency’s decline was further accelerated by the risk-off market sentiment as investors waited for the resolution of the ongoing Italian budget crisis.
The EUR/USD currency pair today fell from an Asian session high of 1.1319 to a low of 1.1264 in the mid-European session.
The currency pair opened today’s session on a downtrend due to the ongoing Italian budget crisis given that Italy defied yesterday’s deadline to submit its revised budget estimates. The release of the German GDP growth data by the Federal Statistical Office in the early European session also drove the pair lower. The German Q3 GDP print contracted by 0.2% instead of the expected 0.1% decline, which translated into an annualized 1.1%; both prints missed expectations. The manufacturing and retail sales sectors were the main culprits behind the GDP growth contraction.
The release of the eurozone Q3 GDP growth data by Eurostat later in the session had a muted impact on the pair as the quarterly print came in at 0.2% translating into an annualized 1.7%; both prints met expectations. The pair was also weighed down by the negative market sentiment as investors looked to Italian developments and Brexit headlines to gauge the single currency’s viability.
The currency pair’s short-term performance is likely to be affected by the release of US CPI data later today and geopolitical headlines.
The EUR/USD currency pair was trading at 1.1266 as at 11:19 GMT having dropped from a high of 1.1319. The EUR/JPY currency pair was trading at 128.33 having fallen from a high of 128.97.
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