The euro today registered a significant drop against the US dollar from the mid-European session following high demand for the greenback boosted by higher US Treasury yields. Mixed data from a cross the Eurozone such as the weak German GDP data released earlier today also contributed to the euro’s weakness against the greenback.
The EUR/USD currency pair today lost over 110 points to drop from a high of 1.1940 to a low of 1.1820.
The currency pair started today’s session trading in a range and dipped slightly after the release of the German GDP data by the Federal Statistical Office in the early European session. The German GDP data missed expectations by recording 0.3% growth versus the expected 0.4% growth. However, the Eurozone Q1 GDP data released by Eurostat was in line with expectations by coming in at a quarterly 0.4% and an annualized 2.5%. Furthermore, the German ZEW survey of expectations also met expectations by coming in at -8.2, while the current situation survey was recorded at 87.4. The Eurozone industrial production data also missed expectations.
The higher demand for the greenback as tracked by the US Dollar Index, which hit a high of 93.46, was the main trigger behind the pair’s decline. US 10-year Treasury yields rallied to highs above 3.06%, which were last seen in 2011. The headline US advance retail sales data for April, which met expectations also contributed to the decline.
The currency pair’s future performance is likely to be affected by tomorrow’s Eruozone CPI, Mario Draghi’s speech, and US housing data.
The EUR/USD currency pair was trading at 1.1861 as at 15:47 GMT having dropped from a high of 1.1940. The EUR/JPY currency pair was trading at 130.77 having declined from a high of 131.13.
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Euro Drops Against a Strong US Dollar Amid Mixed Eruozone Data
