The euro fell against the dollar despite a slate of positive inflation reports from Germany and Italy as investors sold the single currency. The EUR/USD currency pair fell to its daily lows in the early European session and traded sideways for the rest of the day.
The EUR/USD currency pair fell from an initial high of 1.2101 during the Australian market to a low of 1.2027 in the early Frankfurt session and revisited the level during the American session.
The currency pair’s initial decline was driven by the negative investor sentiment towards the euro amid fears the ECB would intervene to stabilise rising bond yields. The release of the upbeat Markit/BME Germany Manufacturing PMI for February, which came in at 60.7, beating expectations by 0.1, had a muted impact on the pair. The positive Markit Eurozone Manufacturing PMI also had a similar effect. The upbeat provisional Germany consumer price index report for February released by the Federal Statistical Office could not lift the pair. The upbeat Italian provisional inflation report released by Istat had minimal impact on the euro.
Dovish comments by ECB Governing Council Member François Villeroy de Galhau said that the bank must react to any undue tightening fueled the pair’s decline. The release of the upbeat ISM US manufacturing PMI, which came in at 60.8, beating analysts estimates of 58.8, drove the pair to its daily lows.
The currency pair’s future performance is likely to be affected by tomorrow’s multiple releases from the euro area.
The EUR/USD currency pair was trading at 1.2044 at 18:43 GMT, having fallen from a high of 1.2101. The EUR/JPY currency pair was trading at 128.66 after dropping from a high of 128.94.
© SimonMugo for Forex News, 2021. |
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Post tags: Consumer Price Index, EUR/JPY, EUR/USD, European Central Bank, Eurozone, Federal Statistical Office, Francois Villeroy de Galhau, ISM, Istat, Manufacturing, Markit Economics, PMI