The euro today fell against the resurgent dollar for the second consecutive day as the impasse regarding the EU’s budget weighs down the single currency. The EUR/USD currency pair was also affected by the risk-off market sentiment as investors bought the safe-haven dollar as the second wave of coronavirus infections intensifies.
The EUR/USD currency pair today fell from a high of 1.1852 in the early Frankfurt session to a low of 1.1816 in the middle of the session before recouping most of its losses during the American market.
The currency pair’s initial decline was driven by the greenback’s rally as tracked by the US Dollar Index, which hit a high of 92.71 today. Coronavirus headlines including news that New York City was closing schools again after the region’s COVID-19 test positivity rate surpassed 3%. News that Tokyo had raised its coronavirus alert levels to the highest possible levels as daily infections stay above 500 also contributed to the pair’s decline. The dovish speech by the ECB Governor Christine Lagarde where she emphasized that fiscal support for the euro area would be crucial in future also drove the pair lower.
The release of the eurozone’s current account data which came in at â¬25.2 billion versus the expected â¬28.6 billion surplus also drove the pair lower. The pair got some relief following the release of the US initial jobless claims report, which was worse than expected. Â
The currency pair’s future performance is likely to be affected by tomorrow’s German PPI and eurozone consumer confidence prints.
The EUR/USD currency pair was trading at 1.1848 as at 17:30 GMT having risen from a low of 1.1816. The EUR/JPY currency pair was trading at 123.00 having fallen from a high of 123.21.
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