The euro today gained significantly against the US dollar after the European Central Bank released its economic bulletin. The US dollar was largely weaker against the euro on the back of increased skepticism surrounding the Republican tax reform bill, details of which are to be released later today.
The EUR/USD currency pair had gained about 40 points from daily lows hit earlier today and was on an uptrend at the time of writing.
The release of the ECB’s economic bulletin triggered the current rally in the currency pair. According to the ECB’s Daniele Nouy, non-performing loans were weighing heavily on the profitability of European banks at a time when banks were dealing with weak profits. The release of the European Commission Autumn economic forecast also boosted the pair. The pair had declined after the release of German trade balance figures by the Federal Statistical Office earlier in the session. This was despite the fact that the trade balance figures exceeded expectations.
The US dollar was weaker against the euro following several wins by Democrats in state elections. The wins cast doubt on whether President Donald Trump would be able to pass his tax reform bill any time soon. Many are skeptical as to whether the tax reform bill shall pass both houses.
The currency pair’s near-term performance is likely to be affected by the release of US jobless claims data later in today’s session.
The EUR/USD currency pair was trading at 1.1624 as at 11:25 GMT having rallied from a daily low of 1.1584 earlier today. The EUR/JPY currency pair was trading at 131.94 having rallied from a low of 131.47.
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