Euro Falls to 4-Week Lows Against Dollar, Later Recovers to Post Gains

The euro today fell to new 4-week lows against the dollar as investor sentiment towards the single currency remained bearish extending yesterday’s losses. The EUR/USD currency pair’s decline was also fueled by the dovish ECB Governing Council minutes, which raised concerns about the euro’s exchange rate.
Today, the EUR/USD currency pair fell to a low of 1.2111 in the early American market before reversing course and rallying to a high of 1.2178 and was near these highs at the time of writing.
The currency pair traded sideways during the Asian session as sellers fought for control following yesterday’s dovish comments by ECB President Christine Lagarde regarding the euro’s exchange rate. The rising coronavirus cases across Europe also weighed on the euro as an expert from Germany’s Robert Koch Institute (RKI) said that the country should have the pandemic under control by the end of 2021. The ongoing political uncertainty in Italy as the former Prime Minister Matteo Renzi quit the government also weighed on the pair. The release of Germany’s 2020 real GDP growth figures by the Federal Statistical Office also boosted the pair.
The ECB minutes’ release drove the pair to its lows as the Governing Council expressed concern about the euro’s exchange rate, inflation, and weak economic growth. The release of the downbeat US initial jobless claims data had a muted impact on the pair, rallied later.
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 1.2156 at 18:54 GMT having risen from a low of 1.2111. The EUR/JPY currency pair was trading at 126.13 having fallen from a high of 126.52.
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Original from: www.earnforex.com