EURUSD slipped decently yesterday and challenged the 1.12 support for the first time in three weeks. It was mainly on rising dollar amid waning concerns over the state of the US economy after stronger-than-expected home sales data.
On Wednesday, the common currency remains under pressure and continues to challenge the 1.12 area. Fresh euro zone data added to the negative sentiment around the pair. After yesterday’s dismal consumer confidence report, German IFO came in below expectations in all of its components for April, confirming the ongoing slowdown in the region’s largest economy. Business climate index decreased to 99.2 from 99.6, the current assessment dropped to 103.2 from 103.8 while business expectations declined to 95.2 from 95.6.
In other news, the ECB said in its monthly economic bulletin that the immediate impact of US car tariffs would be small. This highlights that the monetary authorities aren’t too concerned by the prospects of tariffs, at least for now. The comments brought some relief to the single currency but the overall bearish pressure still persists, and the current dynamics shows the 1.12 handle remains at risk.