Today EUR/USD exchange rate seemed to be weakening as falling economic sentiment in Germany subdued Euro sentiment.
Today, EUR/USD is trading at $1.1243, down 0.5% from today’s opening levels.
Euro sinks despite overall positive data
Today, the Euro appears to be sinking against most of its rivals despite various upbeat data that Germany and the Eurozone released. German industrial production rose by more than expected in October, while EU GDP met expectations of 2.3% growth.
In the Eurozone, economic sentiment increased, exceeding expectations of 23.3 to hit its highest level since the beginning of October. According to the European Economic Research Center, 45.5% of the surveyed analysts and critics predicted a considerable improvement in economic activity.
However, in Germany, economic sentiment has decreased from November 31.8 to 29.8 in December. Despite surpassing expectations of a drop to 25.2, it seems that the data subdued trading sentiment. It happened as EUR/USD lowered for the fifth day in the previous sessions.
ECB policymaker Peter Kazimir said that it was important that the central bank avoided complicating things with new cases or instruments.
Kazimir’s speech contradicts remarks from his fellow policymakers. For example, Madis Muller and Robert Holzmann, a hawkish ECB member, remarked that inflation might pass the bank’s target in 2022.
The US Dollar
The USD is trading higher today as the Federal Reserve’s monetary policy tightening boosts the Greenback.
The market sentiment appeared elevated as China promised to provide support strategies to boost economic growth. Concerns around the new Omicron strain have also decreased, as scientists indicate it comes with mild symptoms.
In the meantime, on Friday, the International Monetary Fund said that the central bank should think about tightening monetary policy faster, repeating comments from Jerome Powell. Powell and his fellow policymakers believe that faster tapering can ease inflation and bring it back under control. According to Bloomberg, this year’s surge in prices reflects rebounding demand, shortages of supplies and labor, and weak transportation networks.