Euro Hits New 2021 Lows Against Dollar Despite Surge in Global Equities

The euro fell to new yearly lows against the much stronger US dollar as the US Senate passed President Joe Biden’s stimulus bill with minor changes. The weak investor sentiment further fueled the EUR/USD currency pair’s decline as investors remained cautious, expecting the ECB to intervene in the markets.
The EUR/USD currency pair fell from a high of 1.1932 in the Australian market to a low of 1.1845 in the American session and was trading near these lows at the time of writing.
The currency pair’s decline was largely fueled by the much stronger dollar as tracked by the US Dollar Index, which hit a high of 92.42. The passing of the $1.9 trillion US stimulus bill by the Senate boosted the dollar at the euro’s expense. The release of the downbeat German industrial production data for January contributed to the pair’s losses. According to the Federal Statistical Office, Germany’s industrial production contracted 0.5% versus analysts expectations of a 0.2% expansion. The release of the upbeat Sentix eurozone investor confidence report for March had a muted impact on the pair despite beating consensus estimates.
The currency pair failed to capitalise on the elevated investor risk appetite that saw all European equity markets close higher. The rising US Treasury yields also underpinned the dollar’s strength driving the pair lower.
The currency pair’s future performance is likely to be affected by tomorrow’s German trade balance and the eurozone GDP report.
The EUR/USD currency pair was trading at 1.1860 at 18:35 GMT, having fallen from a high of 1.1932. The EUR/JPY currency pair was trading at 129.09 after rising from a low of 128.77.
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Original from: www.earnforex.com