EUR/USD Rallies Higher on Trump Firing Rex Tillerson

The EUR/USD currency pair today rallied to new highs after President Trump fired Rex Tillerson as Secretary of State and nominated Mike Pompeo the CIA Director as his replacement. The pair was on an uptrend from the early European session after the European Central Bank‘s Governing Council member, Philip Lane hit the wires stating that the bank was not worried about the euro’s current level.

The EUR/USD currency pair gained over 90 points to rally from a low of 1.2314 to a high of 1.2409 at the time of writing.

The lack of any macro releases from the euro area meant that the single currency was susceptible to development’s regarding the European Union’s retaliatory moves to President Trump’s tariffs on steel and aluminum imports. The pair’s rally was initially triggered by Philip Lane’s hawkish comments, which supported the rally up to the mid-European session when the US CPI report for February was released by the Bureau of Labor Statistics. The headline CPI print came in at an annualized 2.2%, while the core CPI print came in at 1.8%, both prints met expectations.

President Trump’s firing of Rex Tillerson was the main driver behind the pair’s rally as it fueled the greenback’s weakness given that Mr. Tillerson was widely regarded as a moderate, while Mike Pompeo is a well-known hardliner.

The currency pair’s future performance is likely to be affected by the ECB President Mario Draghi‘s speech in Frankfurt and the US advance retail sales data, both scheduled for tomorrow.

The EUR/USD currency pair was trading at 1.2392 as at 17:54 GMT having rallied from a low of 1.2314. The EUR/JPY currency pair was trading at 132.15 having risen from an opening low of 131.10.

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