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Euro Drops on Weak Data amid Investor Fears of New US Car Tariffs

February 19, 2019 at 13:13 by Simon Mugo

Euro coins and EUR banknotes closeupThe euro today was on a downtrend against the US dollar from the early Asian session as investors worried about the introduction of new car tariffs by the US. The pair spiked higher briefly in the early European session, but quickly gave up its gains following the release of weak macro data from across the eurozone.

The EUR/USD currency pair today hit a high of 1.1325 briefly before falling to new daily lows at 1.1275 and was near this level at the time of writing.

The release of the eurozone current account data by the European Central Bank was the main trigger behind the pair’s initial decline as the print missed expectations. The December current account data came in at €16.0 billion versus the expected €21.4 billion. The weak Italian industrial sales data for December released by Istat at the same time also contributed to the fall as the print registered a massive contraction raising alarms about a recession in Italy. The release of the German ZEW economic sentiment indicator shortly afterwards provided a brief respite to the pair as the print was within consensus estimates.

The eurozone construction output for December also met expectations boosting the pair as did the Eurozone ZEW survey. However, the pair soon headed lower as investor fears of new US import tariffs on European-made cars resurfaced.

The currency pair’s future performance is likely to be affected by trade headlines, tomorrow’s German PPI data, and the US FOMC minutes.

The EUR/USD currency pair was trading at 1.1291 as at 13:08 GMT having dropped from a high of 1.1325. The EUR/JPY currency pair was trading at 125.06 having declined from a high of 125.47.

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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