The euro today rallied higher against the US dollar after the release of positive German CPI data by the Federal Statistical Office, which beat expectations. The euro later rallied higher against the weaker US dollar after the release of weak US GDP data for the second quarter by the Bureau of Economic Analysis.
The EUR/USD currency pair gained over 70 points as the height of its rally as investors bought the euro and sold the greenback.
The euro rallied higher after the release of the German CPI data for July, which came in at an annualized rate of 1.7% versus the expected 1.5%. The CPI figures also recorded a month-on-month increase of 0.4% as compared to the market consensus of a 0.2% increase. The Eurozone economic confidence indicator for July released by the European Commission also exceeded expectations by coming in at 111.2 versus the expected 10.8. The only disappointing Eurozone economic release was the business climate indicator, which came in at 1.05 below the expected 1.14.
The US dollar weakened further against the euro after the release of disappointing advance US GDP estimate for the second quarter, which came in at an annualized figure of 2.6%, against the market expectation of 2.7% growth. The US employment cost index for the second quarter released by the Bureau of Labor Statistics was recorded at 0.5%, which was lower than the expected 0.6% increase.
The currency pair’s future performance is likely to be affected by the release of the Eurozone CPI data and the US pending home sales data, both scheduled for Monday.
The EUR/USD pair was trading at 1.1725 as at 13:25 GMT having rallied from a daily low of 1.1670. The EUR/JPY was trading at 130.21 having rallied from a low of 129.54 earlier today.
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