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Euro Crashes on Risk-Off Sentiment, Recoups Losses on Better Mood

July 7, 2020 at 19:39 by Simon Mugo

Stacks of shiney euro coins plus some notes

The euro today fell against the US dollar during the Asian session, driven by the risk-off market sentiment that saw most Asian equity markets selloff. The EUR/USD currency pair recovered some of its losses during the European session despite the mixed releases from across the euro area.

The EUR/USD currency pair today fell from a high of 1.1332 in the Asian session to a low of 1.1259 after the European open before recouping some of its losses.

The currency pair headed lower at the start of today’s session as investor risk appetite remained very low, triggering a selloff in the risk associated universe. The pair kept falling after the release of German industrial production data for May before the European open. According to Germany’s Federal Statistical Office, the country’s industrial production grew 7.8% in May versus the expected 10% expansion. The release of mostly in-line French current account data for May by the Bank of France also did not help the single currency. The same applied to Italy’s retail sales data released by Istat, which met expectations but had a muted impact on the pair.

The pair’s recovery was primarily fueled by the greenback’s weakness, which saw the US Dollar Index retreat from its daily highs. The rising coronavirus cases in several US states such as California and Florida contributed to the dollar’s selloff as Donald Trump’s government plans more stimulus measures.

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

The EUR/USD currency pair was trading at 1.1278 as at 19:38 GMT, having fallen from a high of 1.1332. The EUR/JPY currency pair was trading at 121.29, having dropped from a high of 121.71.

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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