The euro today was buffeted by a deluge of negative news headlines that soured investor sentiment towards the single currency and other riskier currencies. The news headlines included China’s denial of any progress in the trade war talks as well as the Italian budget standoff, which contributed to the EUR/USD currency pair’s massive decline.
The EUR/USD currency pair today fell from a high of 1.1344 to a 2-week low of 1.1290 and was on a downtrend at the time of writing.
The currency pair opened today’s session in a tight consolidation range before heading lower due to the uncertainty relating to Brexit negotiations despite the recent progress. The pair was further weighed down by the standoff between Italy and the European Union regarding its budget despite the Italian government’s willingness to reduce its budget deficit. According to Italy’s Prime Minister Giuseppe Conte, budget discussions will begin on December 3. The pair plunged lower after news headlines emerged that China’s government was denying reports that any progress was made in the US-China trade talks, which dampened investors’ risk sentiment.
During the American session, President Donald Trump announced new tariffs on German cars, which eroded some of the gains made by the pair and drove its lower. This news report further soured investor sentiment towards riskier currencies, especially the euro.
The currency pair’s future performance is likely to be affected by geopolitical events and tomorrow’s US GDP data.
The EUR/USD currency pair was trading at 1.1291 as at 16:26 GMT having fallen from a high of 1.1344. The EUR/JPY currency pair was trading at 128.44 having dropped from a high of 128.85.
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