Euro Falls Against Resurgent Dollar on Weak Inflation and Retail Sales Data

Today, the euro fell against the resurgent dollar amid rising US Treasury yields that boosted the world’s reserve currency despite the turbulent American politics. The EUR/USD currency pair’s decline was also fueled by the disappointing inflation data coming out of the eurozone, causing investors to sell the euro.
The EUR/USD currency pair fell from an initial high of 1.2344 in the Australian market to a low of 1.2245 in the mid-European session before trading sideways up to the American market.
The dollar’s resurgence fueled the currency pair’s initial decline despite yesterday’s invasion of the US Capitol building as Joe Biden was being certified as the next US President. The release of the upbeat German factory orders report for November had a muted impact on the falling pair. According to the Federal Statistical Office, Germany’s factory orders rose 2.3% versus the expected 1.2% decline. The pair’s decline accelerated after Eurostat released the preliminary eurozone inflation report for December showing an annual contraction of 0.3%, which was higher than analysts estimates of a 0.2% decline.
The disappointing eurozone retail sales report for November, which registered a 2.9% decline versus the expected 0.8% increase drove the pair to its daily lows. The pair had a muted reaction to the weak US Goods trade balance for November released by the Census Bureau. The upbeat US initial jobless claims data also had minimal impact on the pair.
The currency pair’s future performance is likely to be affected by the German trade balance and US non-farm payrolls data.
The EUR/USD currency pair was trading at 1.2269 at 20:26 GMT after falling from a high of 1.2344. The EUR/JPY currency pair was trading at 127.40 having risen from a low of 126.91.
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Original from: www.earnforex.com