Euro is down 470 pips from its recent high around 1.137 against Dollar reached during early February. Last week Dollar got its boost from GDP numbers as growth was at 1% for fourth quarter, much better than expected at 0.4%. Wage growth and inflation also picked up in US. Compared to that Euro Zone economic growth has shown signs of weakness this year and according to today's reading single currency area is on its way back to deflation in February. CPI dropped -0.4% in February, dragging annual CPI to -0.2%. Even core CPI weakened to 0.7%, from 1% in January.
German bund has remained well bid in response. Yields are now negative up to 9 years and 10 year yield is at 0.1%. German 2 year yield is currently at -0.56%.
Over the course of 2016, 10 year bund yield has dropped by 53 basis points. In January alone it has dropped as much as 30 points, highest since 2012.
As US 10 year yield has dropped by similar amount, Euro has been relatively stable against Dollar. However it is important to note that US 2 year yield after dropping to 0.65% on February 11th has been rising steadily and down about just 19 basis points for the year.
Euro is currently trading at 1.089 against Dollar.
