The euro today fell to new 6-week lows against the US dollar as investors remained concerned about Italy’s defiance towards the EU’s budget demands. The risk-off sentiment in the market further contributed to the EUR/USD currency pair’s decline as trade war fears dominated the markets on a data-light Monday.
The EUR/USD currency pair today dropped from an opening high of 1.1529 to a low of 1.1458 in the early American session, but had recovered slightly at the time of writing.
The currency pair was on a downtrend from the start of today’s session largely due to the greenback’s recovery following Friday’s disappointing non-farm payrolls data. The release of the German industrial production data by the Federal Statistical Office early in the European session also contributed to the pair’s decline as the print missed expectations. German industrial production contacted by 0.3% in August as opposed to the expected 0.3% expansion. The release of the eurozone sentix investor confidence data shortly thereafter also dragged the pair lower as index came in at 11.4 versus the expected 11.7 figure.
The rally by US 10-year treasury yields, which hit a high of 3.23%, and the greenback’s rally as tracked by the US Dollar Index, which hit a high of 96.03, also contributed to the decline. The Columbus Day celebrations in the USA had minimal impact on the pair.
The currency pair’s future performance is likely to be affected by tomorrow’s German trade balance and current account data.
The EUR/USD currency pair was trading at 1.1479 as at 16:39 GMT having declined from a high of 1.1529. The EUR/JPY currency pair was trading at 129.72 having dropped from a high of 131.24.
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Euro Declines on Italyâs Defiance to the EU Amid Trade War Fears
