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Euro Trades Lower Against US Dollar Ahead of FOMC Minutes

January 3, 2018 at 13:49 by Simon Mugo

Various euro denominationsThe euro today traded lower against the US dollar amid a broad-based greenback recovery for most of today’s session. The single currency was largely unaffected by the positive German employment data released by the Federal Statistical Office.

The EUR/USD currency pair lost over 50 points from today’s high of 1.2065 to hit a low of 1.2010 during the mid-European session.

Several factors contributed to the euro’s decline, chief among them being the positive sentiment around European equity markets, which weakened the euro. The fact that majority of European traders were focused on taking profits on their US dollar shorts after yesterday’s lows also had a negative impact on the single currency. The euro largely ignored the positive German unemployment data, which came in at -29,000 versus the expected -13,000, and the previous -20,000. The German unemployment claims rate for December was also in-line with expectations as it was recorded at 5.5%, but could not reverse the euro’s downtrend.

The greenback’s recovery as tracked by the US Dollar Index, which hit a high of 92.11 today, was the main driver behind the currency pair’s decline. The pair staged a minor recovery after the release of the US MBA mortgage applications report, which recorded a 2.8% decrease.

The currency pair’s short-term performance is likely to be affected by the release of US ISM Manufacturing and Employment data as well as FOMC minutes for the December meeting, all scheduled for later today.

The EUR/USD currency pair was trading at 1.2028 as at 13:45 GMT having dropped from a daily high of 1.2065. The EUR/JPY currency pair was trading at 135.01 having declined from a high of 135.50.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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