Euro Drops on Market Sentiment and Weak German Factory Data

The euro today fell against the US dollar as market risk sentiment remained subdued due to the uncertainty associated with the Sino-US trade negotiations. The EUR/USD currency pair also fell due to weak German factory data, which painted a gloomy picture of the eurozone’s largest economy, and the euro area at large.
The EUR/USD currency pair today fell from a high of 1.1217 in the Asian session to a low of 1.1165 in the American session and was near these lows at the time of writing.
The currency pair opened today’s session with a bullish bias and rallied slightly during the Asian session before reversing and heading lower in the European session. The release of German factory orders for March by the Federal Statistical Office triggered the pair’s decline as the print came in at 0.6% versus the expected 1.5% causing the annualized print to contract more than expected. A slew of mixed data from France and the disappointing Markit Germany construction PMI also contributed to the pair’s decline. The slashing of the German growth forecasts by the European Commission also did not help the pair.
The pair kept dropping in the American session as the greenback rallied higher as tracked by the US Dollar Index, which hit a high of 97.74. The widening yield spread between the US and German 10-year bonds also drove the pair lower.
The currency pair’s future performance is likely to be affected by trade headlines and Mario Draghi’s speech, tomorrow.
The EUR/USD currency pair was trading at 1.1174 as at 18:24 GMT having dropped from a high of 1.1217. The EUR/JPY currency pair was trading at 123.21 having fallen from a high of 124.25.

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