The euro today dropped significantly against the US dollar following the release of disappointing German PMI data by IHS Markit in the early European session. The single currency had traded in a slight upward trend during the Asian session boosted by positive market sentiment and a weak US dollar before plunging lower.
The EUR/USD currency pair today rallied to a high of 1.1421 before crashing to a low of 1.1345 after the disappointing eurozone PMIs.
The currency pair opened today’s session backed by positive investor sentiment due to the recent progress in Brexit negotiations. The release of the final German Q3 GDP data earlier today triggered a slight decline in the pair despite the print meeting expectations. According to the Federal Statistical Office, Germany recorded an annualized GDP growth rate of 1.1% in Q3. The release of the Markit Germany manufacturing PMI, which came in at 51.6 versus the expected 52.2, triggered the pair’s massive drop. The Markit Germany services PMI also disappointed by coming in at 53.3 versus the expected 54.5, also contributing to the decline. Today’s German PMI data marked the lowest prints in 32 months.
The Markit Eurozone manufacturing and services PMIs both missed expectations and contributed to the pair’s massive decline. Investors are worried that with the German economy currently under-performing, economic growth within the European Union will slowdown.
The currency pair’s short-term performance is likely to be influenced by the release of the Markit US manufacturing and services PMIs later today.
The EUR/USD currency pair was trading at 1.1349 as at 11:01 GMT having dropped from a high of 1.1421. The EUR/JPY currency pair was trading at 128.08 having crashed from a high of 128.93.
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