The EUR/USD pair fell sharply in the last hour and touched a fresh weekly low of 1.2036. At the moment, the pair is losing 0.64% on the day at 1.2040 and remains on track to close the week in the negative territory. In the absence of a significant fundamental driver, the recent decline seems to be a product of month-end flows into London fix.
Earlier in the day, the data published by Eurostat showed that the eurozone economy contracted at an annual rate of 1.8% in the first quarter. On a positive note, the Unemployment Rate in the euro area edged lower to 8.1% in March and came in better than the market expectation of 8.3%. Nevertheless, these figures failed to trigger a noticeable market reaction.
In the second half of the day, the US Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) Price Index rose to 1.8% on a yearly basis in March from 1.4% in February as expected. Additionally, the University of Michigan’s Consumer Sentiment Index improved to 88.3 (final) in April from 84.9 in March.
On the back of these upbeat figures, the US Dollar Index extended its rebound and rose above 91.00, allowing the bearish pressure on EUR/USD to gather strength.
There won’t be any other data releases in the remainder of the day and EUR/USD is likely to start consolidating its daily losses ahead of the weekend.