Euro Extends Decline Amid Fears of a Looming Recession in the EU

The euro today fell against the US dollar as market sentiment remained decisively risk-averse amid fears that the eurozone was facing an imminent recession. The EUR/USD currency pair fell for the second consecutive session despite the release of upbeat data from Germany and the euro area, which did little for the pair.
The EUR/USD currency pair today fell from an opening high of 1.0907 to a low of 1.0817 in the American session and was near these lows at the time of writing.
The currency pair fell today as investor risk-appetite tanked in the face of an uncertain future for the euro area as European countries start flattening the COVID-19 curve. Investors are worried that recovery in most EU countries will be slow and that the region could sink into a recession over the next few months. The release of in-line German consumer price index data by the Federal Statistical Office before the markets opened had a muted impact on the pair despite the headline print meeting expectations set at 0.1%. The upbeat eurozone industrial production data released by Eurostat a few hours later had zero impact on the falling pair.
The release of US initial jobless claims report by the Department of Labor, which was lower than expected, also drove the pair lower. Investors were pleased that the jobless claims came in 12 million versus the expected 13.5 million claims.
The currency pair’s future performance is likely to be affected by tomorrows eurozone inflation data and geopolitical events.
The EUR/USD currency pair was trading at 1.0849 as at 17:45 GMT having fallen from a high of 1.0907. The EUR/JPY currency pair was trading at 116.75 having dropped from a high of 117.50.

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