Euro Plunges Against Dollar on Weak Eurozone Trade Balance Data

The euro today fell against the resurgent dollar following yesterday’s speech by Jerome Powell saying that it was too early to consider tapering of the Fed’s bond-buying program. The EUR/USD currency pair’s decline was also supported by the recent dovish comments from European Central Bank officials regarding the euro’s exchange rate.
The EUR/USD currency pair today fell from a high of 1.2162 during the Asian market to a low of 1.2114 in the early American session but was off these lows at the time of writing.
The currency pair’s initial decline was driven by the risk-off market sentiment, which saw the dollar rally against its riskier peers. Hawkish comments from the ECB’s top supervisor Andrea Enria that the coronavirus’s impact on bank balance sheets has been minimal could not reverse the pair’s decline. The release of the eurozone trade balance report for November also had a muted impact on the single currency. According to Eurostat, the eurozone’s trade balance was €25.8 billion, which was slightly lower than consensus estimates of €26 billion. The ongoing ministerial resignations by Matteo Renzi’s Party in Italy also contributed to the pair’s decline, although a snap election is still not on the cards.
The fibre got some relief after the release of the US retail sales report for December, which missed expectations. According to the Census Bureau, US retail sales fell 0.7% in December versus analysts estimates of a flat reading.
The currency pair’s short-term performance is likely to be affected by the US consumer sentiment report set for 15:00 GMT.
The EUR/USD currency pair was trading at 1.2120 at 13:55 GMT, having fallen from a high of 1.2162. The EUR/JPY currency pair was trading at 125.70 having dropped from a high of 126.19.
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Original from: www.earnforex.com