The euro today fell against the US dollar driven by the risk-off market sentiment dominated by fears of a looming global recession in the aftermath of the COVID-19 pandemic. The EUR/USD currency pair extended yesterday’s decline that was triggered by the Fed Chair Jerome Powell’s dismissal of negative interest rates in the US.
The EUR/USD currency pair today fell from an opening high of 1.0824 in the Asian session to a low of 1.0789 in the early European session and was near these lows at the time of writing.
The currency pair’s weakness was attributed to the rising tensions between the US and China as President Donald Trump continues to threaten severe actions against Chinese companies. China has also announced retaliatory measures escalating tensions between the two countries. The release of mixed German consumer price index data for April by the Federal Statistical Office provided temporary relief to the pair. The headline CPI print came in at 0.4% beating analysts estimates by 0.1%, while the annualised print met expectations. The release of the European Central Bank’s economic bulletin a few hours later caused the pair to spike higher briefly.
The dampened investor risk appetite was also reflected in the stock markets where most European indices were down today. Investors were significantly worried about the impact of the German court ruling on the European Union‘s future.
The currency pair’s future performance is likely to be affected by news headlines and US jobless claims data.
The EUR/USD currency pair was trading at 1.0787 as at 11:07 GMT having fallen from a high of 1.0824. The EUR/JPY currency pair was trading at 115.45 having dropped from a high of 115.72.
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