Euro Declines on Negative Market Sentiment, Rallies on Weak US Dollar

The  euro today initially fell drastically in  the  Asian session as  concerns regarding the  risk of  emerging markets contagion triggered a  selloff in  riskier currencies including the  euro. However, the  single currency mounted a  recovery from the  early European session as  market fears dissipated and  the  US dollar retreated from previous highs.
The  EUR/USD currency pair today dropped from a  high of  1.1608 in  the  Asian session to  a  low of  1.1543 before rallying higher in  the  European session.
The  currency pair’s initial decline was triggered by  concerns related to  global trade and  the  risk posed by  crises in  emerging markets. Negative releases from across the  eurozone such as  the  Markit Germany Services PMI and  the  Markit France Services PMI print also drove the  pair lower. However, these losses begun reversing as  positive data from across the  eurozone such as  the  Markit Eurozone Services PMI met consensus estimates by  coming in  at  54.4. The  eurozone retail sales data for  July released by  Eurostat also met expectations by  recording a  0.2% decline, which boosted the  currency pair.
The  pair’s rally was further accelerated by  the  greenback’s retreat as  tracked by  the  US Dollar Index, which hit a  low of  95.09. The  pair kept rallying higher after the  release of  the  positive US trade balance data by  the  Census Bureau.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s German construction PMI and  the  crucial US ADP employment report.
The  EUR/USD currency pair was trading at  1.1629 as  at  13:31 GMT having rallied from a  low of  1.1543. The  EUR/JPY currency pair was trading at  129.84 having risen from a  low of  128.69.

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