Euro Falls on Sour Mood and Vaccine Concerns, Ignores Upbeat GDP

The euro fell against the much stronger dollar for the second consecutive day as the greenback rallied higher boosted by America’s positive growth prospects. The EUR/USD currency pair’s decline was also fueled by the upbeat investor sentiment favouring safe-haven assets that saw US Treasury yields rise.
The EUR/USD currency pair fell from a high of 1.2087 during the Asian market to a low of 1.2011 in the American session and was near these lows at the time of writing.
The currency pair’s rally was driven by the divergence in COVID-19 vaccine rollout between the European Union and the US with the old continent being way behind the US. Investors are betting on faster US economic recovery as compared to the EU. The upbeat French flash consumer price index report for January released by Insee barely moved the pair. The release of the upbeat Italian preliminary GDP report for Q4 2020 by Istat had a muted impact on the pair despite the print beating analysts estimates by 0.1%. The upbeat Eurozone preliminary Q4 GDP report could not reverse the pair’s decline. According to Eurostat, the euro area GDP shrunk 0.7% in Q4 compared to analysts’ estimates of a 1.2% contraction.
The greenback’s rally as tracked by the US Dollar Index, which hit a high of 91.28 fueled the pair’s decline. The upbeat IBD/TIPP economic optimism February index, which beat expectations by 0.1%, also drove the pair lower.
The currency pair’s future performance is likely to be affected by tomorrow’s multiple eurozone and US macro reports.
The EUR/USD currency pair was trading at 1.2023 at 19:29 GMT after falling from a high of 1.2087. The EUR/JPY currency pair was trading at 126.33 having dropped from a high of 126.82.
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Original from: www.earnforex.com