Euro Falls on Coronavirus Fears, Ignores Upbeat German IFO Data

The euro today gapped lower against the US dollar to start of the week trading with a bearish bias amid the risk-off market sentiment created by coronavirus headlines. The EUR/USD currency pair oscillated between gains and losses during today’s session as bears fought to control the pair’s price despite the upbeat German macro reports.
The EUR/USD currency pair ended up trading in a wide range marked by a high of 1.0842 and a low of 1.0805 and was within this range at the time of writing.
The currency pair gapped lower at the start of the Asian session as traders sold the riskier assets in the face of new coronavirus infections. News reports over the weekend indicated that the virus had spread to more countries including Italy, Iran and South Korea, which could trigger a global pandemic. The pair opened lower but quickly rallied before entering a sustained decline in the Asian session. The release of the upbeat German IFO business climate index for February triggered a brief spike by the pair. The IFO current assessment and future expectations prints also beat consensus estimates pushing the pair higher.
However, the pair quickly retreated as the greenback surged higher as tracked by the US Dollar Index, which hit a high of 99.64. The pair remained susceptible to news headlines given the lack of major releases from both the European and American dockets.
The currency pair’s future performance is likely to be affected by news headlines and tomorrow’s German GDP data.
The EUR/USD currency pair was trading at 1.0817 as at 13:13 GMT having fallen from a high of 1.0842. The EUR/JPY currency pair was trading at 120.49 having dropped from a high of 121.06.

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