The EUR/USD trades near 2-year lows after the GFK report stirs market anxiety
The euro remained under pressure on Friday, as the GFK consumer climate report came out below its previous value and below analysts’ expectations, making markets anxious about the perspectives in front of the German economy.
The euro remained subdued against the US dollar, as on Friday it hovered around two-year lows, after the disappointing data publicized in the German GFK consumer climate report further intensified concerns that the country’s economy is experiencing a slowdown.
The EUR/USD slumped to the session low of 1.2738 in late Asian trade, but later consolidated at 1.2742. As of 2:44 am London time, the EUR/USD is digging the session lows of 1.2708. Support for the pair is likely at 1.2660, whereas resistance is expected at 1.2864.
The EUR/GDP was trading slightly lower at 0.7802.
Pressure on the euro persisted as data came out yielding a slight decline for this month in GFK, the German consumer climate index, to 8.3, down from the August 8.6, and below analysts’ expectations for 8.5. The report further aggravated concerns regarding the euro zone’s biggest economy’s growth. Wednesday data of Ifo, the German business confidence index, declined for the fifth straight month in September.
On Thursday, the EUR/USD slumped to almost two-year lows, after ECB President Mario Draghi once again confirmed the bank’s determination for further policy measures to prop inflation in the euro zone, if downside price pressures persisted for too long. He added that the central bank was ready to deal with the deflation threat with all tools available.
In the meantime, expectations for a US rate hike to occur earlier than previously anticipated boosted the dollar. According to Richard Fisher, Dallas Fed President, the Federal Reserve might be expected to start hiking rates in the spring of 2015.
