Euro Drops on Weak German Industrial Data and Strong US Dollar

The  euro today dropped against the  US dollar from the  start of  today’s session as  the  greenback rebounded on investors’ hopes about the  outcome of  the  US-China trade talks. The  rebound in  US Treasury yields also boosted the  greenback, which was under intense selling pressure since Friday last week following dovish Fed comments.
The  EUR/USD currency pair today dropped from an  opening high of  1.1484 to  a  low of  1.1421 in  the  early American session.
The  currency pair’s decline was precipitated by  the  US dollar’s rebound from yesterday’s drop, which was triggered by  the  release of  the  disappointing US ISM Non-Manufacturing PMI. The  release of  the  German industrial production data for  November drove the  pair lower as  the  print missed expectations. According to  Germany’s Federal Statistical Office, industrial production contracted by  a  massive 1.9% versus the  expected 0.3% expansion. The  release of  the  eurozone business climate indicator for  December by  the  European Commission also contributed to  the  decline as  the  print came in  at  0.88 as  compared to  the  consensus estimate of  0.99.
The  disappointing eurozone economic sentiment indicator, the  services confidence and  the  industrial confidence prints all put immense downward pressure on  the  euro. The  stronger greenback as  tracked by  the  US Dollar Index, which hit a  high of  96.03, also contributed to  the  pair’s decline.
The  currency pair’s short-term performance is likely to  be influenced by  President Donald Trump‘s speech and  the  US consumer credit data, both due later today.
The  EUR/USD currency pair was trading at  1.1435 as  at  15:08 GMT having dropped from a  high of  1.1484. The  EUR/JPY currency pair was trading at  124.48 having declined from a  high of  124.87.

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