The euro today rallied higher against the US dollar from the Asian session following yesterday’s dovish FOMC minutes. The positive German GDP data fueled the euro’s rally into the early European session before a slight retracement ensued following the release of the latest ECB minutes.
The EUR/USD currency pair today rallied from a low of 1.1690 to a high of 1.1750 for a peak gain of over 55 points.
The currency pair’s rally was initially triggered by the US dollar’s weakness in the Asian session before the positive German releases. The headline German GDP data released by Germany’s Federal Statistical Office was in line with expectations coming in at an annualized 2.3%, while core GDP data came in at 1.6%. Other releases from the German docket included private consumption data, capital investment and construction investment data. German exports and imports were lower than expected and so was German government spending in Q1. The German GfK consumer climate survey for May was lower than expected, but did not derail the pair’s rally.
The currency pair headed lower after the European Central Bank released its account of monetary policy meeting highlighting concerns regarding the increased risk of protectionist policies. The release of the disappointing initial jobless claims data by the US Department of Labor triggered a slight rally in the pair.
The currency pair’s future performance is likely to be affected by tomorrow’s German IFO expectations data and US durable goods orders.
The EUR/USD currency pair was trading at 1.1749 as at 14:13 GMT having rallied from a low of 1.1690. The EUR/JPY currency pair was trading at 128.27 having dropped from a high of 128.88.
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