Euro Drops to $1.1593 Ahead of Economic Data
The euro dollar (EURUSD) pair dropped to $1.1593 on Monday with investors awaiting European Central Bank (ECB) speeches and key US economic data for guidance on Federal Reserve policy.
The single currency had gained as global risk appetite improved, and the safe-haven USD softened, providing a mechanical lift to the euro through its strong inverse correlation with the dollar.
The European single currency has gained about 12% against the US dollar since the beginning of 2025 amidst a weak dollar index. There has been little new economic data to guide markets. Eurozone industrial output and employment readings have been lacklustre, and producer prices are still falling.
The prolonged US government shutdown has delayed key statistics, leaving traders to navigate by sentiment rather than economic facts.
The European Central Bank (ECB) Vice President Luis de Guindos expressed confidence that Eurozone inflation will converge toward the bank’s target but cautioned about tariffs, sovereign debt, and the risks of a sudden shift in market sentiment.
EURUSD held above $1.16 before the weekend, the pair slipped lower earlier today. Options for about 485 Million euros struck at $1.16 expire today. Support is seen in the $1.1575-85 area amidst subdued eurozone data week.
The ECB’s September projections put GDP growth at 1.2% this year and 1.0% next year, but the consumer price index forecasts were for 2.1% this year and 1.7% in 2026.
The Dollar Index was sold to almost 99.00, its lowest level this month, and it is holding today. DXY also settled below the 20-day moving average.
German sentiment deteriorated unexpectedly, and Eurozone industrial output undershot expectations. Still, rising expectations that the ECB will remain on hold while the BoE continues cutting rates kept EUR well-supported throughout the week. Nigeria’s Aviation Industry Most Viable, Under-Exploited — Tinubu
