The euro today fell drastically against the US dollar after having traded sideways for the past two sessions as investors anticipate a rate cut at tomorrow’s ECB meeting. The EUR/USD currency pair fell for the better part of today’s session even as the empty European docket meant that there were no fundamental releases to boost the single currency.
The EUR/USD currency pair today fell from an opening high of 1.1055 to a low of 1.0986 in the early American session breaching the crucial 1.1000 level before retracing some of its losses.
The currency pair traded sideways for most of the Asian session and even attempted to rally boosted by news that Germany may be considering stimulus measures. However, this was not enough to keep the single currency from falling as investors wait nervously for the outcome of tomorrow’s European Central Bank meeting. Investors will be watching Mario Draghi‘s speech closely to see just how much the central bank Governor is willing to do to support the eurozone economy. The downgrading of Germany’s 2020 GDP forecast by the Kiel Institute also had a negative impact on the shared currency’s performance.
The greenback’s recovery as tracked by the US Dollar Index, which hit a new weekly high of 98.75, also drove the pair lower. The release of the upbeat US PPI data for August by the Bureau of Labor Statistics also contributed to the pair’s decline.
The currency pair’s future performance is likely to be affected by tomorrow’s ECB rate decision and US CPI data.
The EUR/USD currency pair was trading at 1.1010 as at 17:4 GMT having fallen from a high of 1.1055. The EUR/JPY currency pair was trading at 118.65 having dropped from a high of 119.16.
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