Euro Falls As ECB Mulls a Rate Cut To Weaken the Euro and Boost Inflation

The euro fell against the dollar after officials from the European Central Bank clarified that they would intervene if the single currency’s strength affected inflation. The EUR/USD currency pair’s decline later recouped some of its losses in a snapback move as the US Dollar Index fell triggering a recovery by its peers including the euro.
The EUR/USD currency pair fell to a low of 1.2058 in the early American market but later recovered some of its losses having traded at a high of 1.2170 at the start of today’s session.
The currency pair’s fall was driven by The release of the German GfK consumer confidence survey for February, which came in at -15.6 versus the expected -7.9 print. Dovish comments from Klaas Knot, a member of the ECB’s Governing Council that the bank would act on the euro if its strength undermined its inflation target also drove the pair lower. The disappointing French consumer confidence report for January released by Insee also contributed to the pair’s decline. Investors were also worried about the political crisis in Italy triggered by Prime Minister Giuseppe Conte’s resignation. Italy could hold fresh elections in the spring.
The pair hit its bottom shortly after the release of the mixed US durable goods orders data for December. According to the US Census Bureau, America’s durable goods orders rose 0.2% in December versus consensus estimates pegged at 0.9%.
The currency pair’s future performance is likely to be affected by tomorrow’s multiple releases from across the eurozone.
The EUR/USD currency pair was trading at 1.2113 as at 18:45 GMT having fallen from a high of 1.2170. The EUR/JPY currency pair was trading at 126.09 having recovered from a low of 125.60.
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Original from: www.earnforex.com