Euro Falls on Weak German GDP Growth as Italian Crisis Persists

The  euro today fell significantly against the  US dollar following the  release of  weak German GDP growth data in  the  early European session. The  single currency’s decline was further accelerated by  the  risk-off market sentiment as  investors waited for  the  resolution of  the  ongoing Italian budget crisis.
The  EUR/USD currency pair today fell from an  Asian session high of  1.1319 to  a  low of  1.1264 in  the  mid-European session.
The  currency pair opened today’s session on  a  downtrend due to  the  ongoing Italian budget crisis given that Italy defied yesterday’s deadline to  submit its revised budget estimates. The  release of  the  German GDP growth data by  the  Federal Statistical Office in  the  early European session also drove the  pair lower. The  German Q3 GDP print contracted by  0.2% instead of  the  expected 0.1% decline, which translated into an  annualized 1.1%; both prints missed expectations. The  manufacturing and  retail sales sectors were the  main culprits behind the  GDP growth contraction.
The  release of  the  eurozone Q3 GDP growth data by  Eurostat later in  the  session had a  muted impact on  the  pair as  the  quarterly print came in  at  0.2% translating into an  annualized 1.7%; both prints met expectations. The  pair was also weighed down by  the  negative market sentiment as  investors looked to  Italian developments and  Brexit headlines to  gauge the  single currency’s viability.
The  currency pair’s short-term performance is likely to  be affected by  the  release of  US CPI data later today and geopolitical headlines.
The  EUR/USD currency pair was trading at  1.1266 as  at  11:19 GMT having dropped from a  high of  1.1319. The  EUR/JPY currency pair was trading at  128.33 having fallen from a  high of  128.97.

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