EUR/USD Declines Despite Improving Investor Confidence in Eurozone

The EUR/USD pair declined today, falling for the third trading session in a row, despite the improving investor confidence in the eurozone. The euro fared far better against other major rivals, though.
The sentix eurozone economic index rose from -2.7 in December to 1.3 in January, missing the consensus forecast of 2.0. Nevertheless, it was the first positive reading since February 2020. The report said that it means “investors are ignoring the current lockdowns and have complete confidence in a successful vaccination strategy”. Overall, the report sounded very optimistic, stating:

Although large parts of Europe are suffering from a lockdown and the Corona pandemic seems to be flaring up again in other parts of the world, such as Japan, economic expectations continue to rise. In Euroland, they reach 33.5 points, the highest level since records began in 2003. This very positive assessment of expectations is likely to be very much in line with the prospects of a successful vaccination campaign.

Market analysts provided several possible reasons for why the euro was unable to rally versus the US dollar despite the positive domestic macroeconomic data. One of them was widening US Treasury yields. Another one was the outlook for fiscal stimulus as president-elect Joe Biden has promised trillions of dollars in coronavirus-relief spending in case he wins the election. And yet another one was the rising number of new COVID-19 infections and the appearance of new strains of the coronavirus in different parts of the world.
EUR/USD dropped from 1.2212 to 1.2154 as of 13:27 GMT today. EUR/JPY was trading at 126.74, near the opening level of 126.80. EUR/CHF rallied from 1.0821 to 1.0837.
If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

Original from: www.earnforex.com