Euro Falls on US Stimulus Hopes and Risk-Off Mood, Disregards PMIs

The euro fell against the dollar for the third straight session today despite the release of multiple upbeat PMI prints from the euro area by Markit Economics. The EUR/USD currency pair’s decline was also fueled by the upbeat US jobs data and hopes for a massive US stimulus package from the democrats.
Today, the EUR/USD currency pair fell from a high of 1.2049 during the Australian session to a low of 1.2004 in the early American session and was trading slightly off these lows at the time of writing.
The currency pair’s decline was initially fueled by investor optimism about the possibility of a large US stimulus package as democrats pushed their proposals through Congress. The release of upbeat Markit Italy services PMI for January had a muted impact on the pair. The downbeat Markit Germany Services PMI, which came in at 46.7 missing expectations dragged the pair lower. The upbeat Markit Eurozone composite PMI recorded at 47.8 versus consensus estimates of 47.5 had a minimal impact on the pair.
The upbeat Eurozone preliminary inflation report for January released by Eurostat, which came in at an annualised 0.9% beating analysts’ estimates set at 0.5% couldn’t stop the pair’s decline. Investors cheered Mario Draghi’s new mandate to form the next Italian government.
The upbeat US ADP employment change report for January, which saw the US add 174,000 jobs handily beating expectations of 49,000 jobs also boosted the dollar as did the upbeat ISM US Services PMI.
The currency pair’s future performance is likely to be affected by tomorrow’s eurozone retail sales data.
The EUR/USD currency pair was trading at 1.2023 at 18:34 GMT having fallen from a high of 1.2049. The EUR/JPY currency pair was trading at 126.29 having dropped from a high of 126.52.
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Original from: www.earnforex.com