The euro fell against major peers on Thursday as weaker-than-expected economic data and a broad decline in eurozone bond yields pressured the currency.
Euro area industrial production fell 1.3% month-on-month in June, reversing May’s 1.1% gain and missing expectations, with sharp declines in capital goods and non-durable consumer goods output.
The data reinforced concerns following Tuesday’s ZEW Economic Sentiment Index drop, which fell below forecasts. This could raise concerns over EU economic growth and weigh on the currency.
German and French government bond yields declined across the curve, with the 10-year benchmarks in both countries hitting weekly lows. The sharp drop in eurozone industrial output and weaker sentiment data could reinforce demand for safe-haven debt, driving yields lower.
Looking ahead, traders will monitor next week’s PMI releases and euro area confidence data for further signals on economic momentum. Any signs of continued weakness could weigh on the euro and yields.
