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Euro Falls on Middle East Tensions, Ignores Upbeat Eurozone Data

January 7, 2020 at 19:35 by Simon Mugo

A fan of 500-euro billsThe euro today fell against the much stronger US dollar amid heightened political tensions in the Middle East as investors bought the safe-haven greenback. The EUR/USD currency pair was on a downward spiral from the start of the session ignoring upbeat eurozone releases, which accelerated after the release of upbeat US data.

The EUR/USD currency pair today fell from an opening high of 1.1197 in the Asian session to a low of 1.1133 in the American session and was near these lows at the time of writing.

The currency pair fell earlier today amid rising Middle Eastern tensions after Russian President Vladimir Putin made a surprise visit to Syria. Russia played a crucial role in keeping Syrian President Bashar al-Assad in power during the civil war. The release of upbeat eurozone retail sales data for November by Eurostat could not boost the euro. The monthly retail sales came in at 1% translating into an annualised 2.2% beating consensus estimates set at 1.3%. The in-line preliminary eurozone inflation report for December, which came in at 1.3% also did nothing. The single currency also ignored the release of the upbeat Italian CPI data for December by Istat.

The release of the upbeat US trade balance data for November by the Census Bureau in the American session drove the pair lower. The release of the upbeat US ISM Non-manufacturing PMI for December hours later also boosted the dollar.

The currency pair’s future performance is likely to be affected by geopolitical events and tomorrow’s German factory orders.

The EUR/USD currency pair was trading at 1.1144 as at 19:34 GMT having fallen from a high of 1.1197. The EUR/JPY currency pair was trading at 120.98 having dropped from a high of 121.44.

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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