Euro Rallies Higher Against US Dollar on ECB Minutes

The euro today rallied against the US dollar after the European Central Bank released the minutes of its January meeting in the mid-European session. The single currency had declined against the greenback starting in the American session yesterday after the release of the FOMC minutes.

The EUR/USD currency pair rallied by over 85 points from a daily low of 1.2260 to hit a high of 1.2351 at the time of writing.

The currency pair extended yesterday’s losing steak into the late Asian session where it was it traded sideways. The pair rallied slightly then declined following the release of the German IFO business climate index for February. The index came in at 115.4 in February as compared to the expected 117.0 and the previous 117.6. The IFO expectations index was recorded at 105.4 versus the consensus estimate of 107.9 and the previous 108.3. The current assessment print came in at 126.3, which was lower than the estimated 127.0 and the previous 127.8.

The release of the ECB minutes of the January policy meeting triggered a massive rally in the currency pair. Investors interpreted the minutes as being hawkish, which contributed to the pair’s rally. The release of the US initial jobless claims data by the Department of Labor could not stop the pair’s rally, which was also fueled by a weaker greenback.

The currency pair’s future performance is likely to be affected by tomorrow’s raft of German macro releases covering GDP, imports, exports, private consumption and government spending among others.

The EUR/USD currency pair was trading at 1.2339 as at 15:41 GMT having rallied from a low of 1.2260. The EUR/JPY currency pair was trading at 131.75 having dropped from a high of 132.21.

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