The euro today initially fell drastically in the Asian session as concerns regarding the risk of emerging markets contagion triggered a selloff in riskier currencies including the euro. However, the single currency mounted a recovery from the early European session as market fears dissipated and the US dollar retreated from previous highs.
The EUR/USD currency pair today dropped from a high of 1.1608 in the Asian session to a low of 1.1543 before rallying higher in the European session.
The currency pair’s initial decline was triggered by concerns related to global trade and the risk posed by crises in emerging markets. Negative releases from across the eurozone such as the Markit Germany Services PMI and the Markit France Services PMI print also drove the pair lower. However, these losses begun reversing as positive data from across the eurozone such as the Markit Eurozone Services PMI met consensus estimates by coming in at 54.4. The eurozone retail sales data for July released by Eurostat also met expectations by recording a 0.2% decline, which boosted the currency pair.
The pair’s rally was further accelerated by the greenback’s retreat as tracked by the US Dollar Index, which hit a low of 95.09. The pair kept rallying higher after the release of the positive US trade balance data by the Census Bureau.
The currency pair’s future performance is likely to be affected by tomorrow’s German construction PMI and the crucial US ADP employment report.
The EUR/USD currency pair was trading at 1.1629 as at 13:31 GMT having rallied from a low of 1.1543. The EUR/JPY currency pair was trading at 129.84 having risen from a low of 128.69.
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