The EUR/USD currency pair showed extreme price fluctuations lately, trading around the 1.1700 level. This duo proved a mixed performance Wednesday, just like the US Dollar as mixed economic signals continue to shake the pair.
Global traders were processing the newly-released economic data with laser focus. The EUR/USD currency pair hardly reacted after the release of US PPI. Normally, the PPI figures for August beating analysts’ expectations would be sufficient to strengthen a currency. The subsequent impact on the EUR/USD was muted, causing the pair to mostly swim in place around the important 1.1700 level.
Market watchers pointed out that the failure of EUR/USD to make any clear move one way or the other is typical of general skittishness across financial markets. Traders are following both Euro-zone and US economic news closely. This caution is justifiable because the EUR/USD pair has historically been very volatile, exhibiting movements that can suggest future directional changes.
Even with the disappointing PPI data, the US Dollar continued to prove itself resilient. This is representative of the dynamic interaction of positive and negative factors affecting each currency. Traders were cautious in reaction to the figures, weighing what the figures might portend for monetary policy and inflation expectations.
The recent EUR/USD price action illustrates investor expectations ahead of key economic releases and policy announcements from the central banks. Traders are looking ahead to more data releases for greater direction for the currency pair.