The euro today rallied higher against the US dollar after the release of positive EU producer price index data by Eurostat. The EUR/USD pair rallied higher after the release of the US ADP employment report, which was below expectations.
The EUR/USD currency pair rose by about 70 points at the height of its rally as the euro gained against the US dollar. The currency pair hit a yearly high of 1.1868, then retraced some of its gains before rallying higher.
The EUR/USD pair hit the 2017 high during the early European session as the EU producer price index reported a 2.5% increase on an annualized basis, which was in line with market expectations. The PPI declined by 0.1% on a monthly basis also in line with the market consensus. Although the two figures were as expected, the markets assumed that since the factory inflation figures were on track, the European Central Bank would soon initiate its tapering program.
The release of the US ADP employment report triggered another rally in the EUR/USD pair, which caused it to recoup most of its daily loses. The ADP report indicated that the US private sector added 148,000 jobs as opposed to the market expectation of 190,000 jobs. The drop was largely attributed to the June ADP report, which was revised upwards.
The currency pair’s future performance is likely be affected by the release of the ECB economic bulletin, and the US ISM Non-manufacturing composite, both scheduled for tomorrow.
The EUR/USD pair was trading at 1.1860 as at 15:20 GMT having rallied from a daily low of 1.1792. the EUR/JPY was trading at 130.95 having rallied from a low of 130.35.
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