Euro drops on better inflation data from Germany and Spanish manufacturing at an 8 year high
What may be a strange reaction to the better data in the euro is probably explained better in the bond market. Previously we've seen the market start to talk about an early ECB finish to QE when the data has started to come in higher. Whilst on paper that should translate to the euro going up it looks like bonds are moving the euro lower
Yields at the moment are pushing higher which means traders are selling. If flows are coming out European bonds on the back of better data, and that the ECB might cut short QE, then they will most likely be flowing into the US on the back of expected rate hikes
At the moment European yields are up near the highs
I'm not saying this is the definitive reason but it's just what I'm seeing in the market right now
EURUSD has blown through bids and then the stops at 1.0920 to a low of 1.0912
