The euro today broke out of its 3-day consolidative range and fell drastically against the US dollar following the release of weak German factory data. The EUR/USD currency pair later extended its losses following the release of the upbeat US non-farm payrolls data in the early American session.
The EUR/USD currency pair today fell from an opening high of 1.1286 to a low of 1.1206 after the release of the US jobs data and was near these lows at the time of writing.
The euro opened today’s session trading with a slightly bearish bias against the greenback before falling decisively in the early European session. The release of the weak German factory orders for May by the Federal Statistical Office triggered the pair’s first decline. The factory orders contracted 2.2% in May as opposed to the expected 0.1%, which shocked investors. The weak factory orders were driven by weak domestic and foreign demand indicating that the German economy was still facing major headwinds. The German 10-year bund yields also contributed to the euro’s given yesterday’s historic drop to -0.41%, which was much lower than the European Central Bank’s -0.40% deposit rate.
The release of the US nonfarm payrolls by the Bureau of Labor Statistics drove the pair to its daily lows as the print beat expectations largely due to short-term hiring by the Census Bureau in preparation for next year’s national census.
The currency pair’s performance over the upcoming weekend is likely to be affected by geopolitical events.
The EUR/USD currency pair was trading at 1.1218 as at 17:06 GMT having dropped from a high of 1.1286. The EUR/JPY currency pair was trading at 121.77 having fallen from a high of 121.92.
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