The EUR/USD currency pair today dropped significantly despite the release of positive Eurozone trade balance data in the early European session. The currency pair reversed its decline after the release of US consumer sentiment data in the early American session, but could not rally back to its session high.
The EUR/USD currency pair traded in a tight range between a high of 1.2346 and a low of 1.2306 for most of today’s session.
The currency pair’s initial rally occurred in the early European session following the release of the German consumer price index data by the Federal Statistical Office. The final CPI data for March came in at a monthly 0.4% and an annualized 1.6%, which was in line with expectations. Dovish comments by the European Central Bank Governing Council member Jan Smets regarding the weak inflation in the Eurozone triggered the pair’s decline. The release of the positive Eurozone trade balance data by Eurostat later in the session, could not reverse the pair’s downtrend. The trade balance data came in at â¬21 billion, which was much higher than the expected â¬20.2 billion.
The currency pair’s tepid recovery was triggered by hawkish comments from Fed speakers, Eric Rosengren and James Bullard. The release of the weak University of Michigan consumer sentiment survey served to boost the pair’s recovery.
Given the upcoming weekend, the currency pair’s future performance is likely to be influenced by political events in Europe and the USA.
The EUR/USD currency pair was trading at 1.2325 as at 15:54 GMT having rallied from a low of 1.2306. The EUR/JPY currency pair was trading at 132.49 having dropped from a high of 132.90.
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