The euro today fell against the much stronger US dollar amid a global rush for the world’s sole reserve currency as the world grapples with the coronavirus pandemic. The EUR/USD currency pair’s decline was further fueled by weak data from Germany and the euro area as European countries fight to contain rising coronavirus cases.
The EUR/USD currency pair today fell from an initial high of 1.1189 to a low of 1.0955 in the American session and was trading near the day’s lows at the time of writing.
The currency pair printed new monthly lows earlier today as demand for the US dollar in the derivatives market caused the greenback to rally as racked by the US Dollar Index, which hit a high of 99.83. The pair’s woes intensified with the release of the German ZEW economic sentiment survey for March, which came in at -49.5 missing analysts’ expectations pegged at -26.4. The ZEW economic sentiment for the euro area also missed consensus estimates dragging the pair lower. The demand for the greenback flew in the face of the quantitative easing measures announced by the US Federal Reserve on Sunday as it cut rates by 100 basis points.
The rising demand for the dollar could be driven by lenders hoarding the reserve currency as they expect high demand from businesses and institutions. The weak US retail sales data released by the Census Bureau had a muted impact on the currency pair.
The currency pair’s future performance is likely to be affected by market forces and investor risk sentiment.
The EUR/USD currency pair was trading at 1.0976 as at 17:43 GMT having fallen from a high of 1.1189. The EUR/JPY currency pair was trading at 117.89 having dropped from a high of 119.68.
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