The euro today attempted to rally against the US dollar but failed to make any significant gains as investors sold the single currency on disappointing German GDP data. The EUR/USD currency pair failed to break above the crucial 1.1200 level amid selling pressure as fears of a German recession drove investors to the safe-haven dollar.
The EUR/USD currency pair today rallied to a high of 1.1191 in the mid-European session before falling to a low of 1.1137 in the American session and was near these lows at the time of writing.
The currency pair traded with a bearish bias for most of the Asian session before rallying higher in the early European session. The pair’s rally was short-lived as it started trading sideways following the release of the German Q2 GDP report by the Federal Statistical Office. The preliminary figures revealed that the German economy contracted by 0.1% in the second quarter, which sparked fears of a recession. The release of the eurozone GDP data for Q2 a few hours later did little to boost the pair. According to Eurostat, the euro area GDP grew 0.2% in Q2 translating into an annualized 1.1%, which was expected.
The currency pair fell heavily in the American session despite inversion of the 2-year and 10-year US yield curves. Investors were also worried about the impact of the US-China trade war on Germany’s export-based economy.
The currency pair’s future performance is likely to be affected by trade headlines given tomorrow’s empty European dockets.
The EUR/USD currency pair was trading at 1.1141 as at 15:35 GMT having fallen from a high of 1.1191. The EUR/JPY currency pair was trading at 117.93 having dropped from a high of 119.14.
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