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EUR/USD Drops to New Lows Despite Positive Eurozone Data

January 8, 2018 at 14:13 by Simon Mugo

A fan of 500-euro billsThe EUR/USD currency pair today declined to new lows below the crucial 1.2000 psychological level and was on a track to book the second consecutive losing session this year. The currency pair’s decline was largely triggered by the goodish recovery in the US dollar as investors ignored Friday’s disappointing US jobs data.

The EUR/USD currency pair lost over 80 points from a session high of 1.2052 to hit a low of 1.1967 in the early American session.

The release of German factory orders for November by the Federal Statistical Office contributed to the pair’s decline early in the European session. The factory orders declined by 0.4% in November translating to an annualized 8.7%. The positive Eurozone Sentix Investor Confidence survey could not boost the single currency despite coming in at 32.9 versus the expected 31.3 in January. The Eurozone retail sales data for November released by Eurostat also could not reverse the euro’s decline despite being recorded at 1.5% on a monthly basis and at 2.8% on an annualized basis.

The Eurozone business climate indicator for December was also higher than expected at 1.66 as compared to the expected 1.5. The Eurozone economic confidence was also better than expected by coming in at 116.0 versus the consensus estimate of 114.8. The uptick in US treasury bond yields was the main driver behind the euro’s decline as it increased the US dollar demand.

The currency pair’s future performance is likely to be affected by tomorrow’s German trade balance and unemployment rate data.

The EUR/USD currency pair was trading at 1.1971 as at 14:09 GMT having dropped from a high of 1.2052 earlier today. The EUR/JPY currency pair was trading at 135.19 having declined from a daily high of 136.32.

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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