The euro today dropped significantly against the US dollar after the European Central Bank released the minutes of its latest monetary policy meeting. The single currency’s decline started in the Asian session due to the imminent risk of an escalation in Syria involving the USA and Russia.
The EUR/USD currency pair today lost over 79 points to decline from a high of 1.2379 to trade at a low of 1.2299 at the time of writing.
The currency pair’s decline started during the Asian session due to investors’ risk aversion triggered by the likelihood of US military intervention in Syria. The release of weak Eurozone industrial production data for February by Eurostat in the early European session also contributed to the pair’s decline. Industrial production in the euro area contracted by 0.8% versus the expected 0.1% growth, which translated into an annualized 2.9%, missing expectations. The ECB minutes revealed that members were concerned about the impact of trade conflicts and weak inflation growth in the region.
The US dollar rallied against the euro following yesterday’s hawkish FOMC minutes as tracked by the US Dollar Index. The weak initial jobless claims data released by the Department of Labor had a muted impact on the currency pair. The greenback was further boosted by the receding immediate risk of a US military strike on Syria.
The currency pair’s future performance is likely to be affected by tomorrow’s German CPI data and the University of Michigan consumer sentiment survey.
The EUR/USD currency pair was trading at 1.2316 as at 15:18 GMT having dropped from a high of 1.2379. The EUR/JPY currency pair was trading at 132.17 having risen from a low of 131.76.
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