The euro today recovered from the 14-month lows hit yesterday following the news that trade negotiations between China and the USA are set to resume later this month. The EUR/USD currency pair was also boosted by the release of the latest Eurozone trade balance data in the early European session, which beat expectations.
The EUR/USD currency pair today rallied from a low of 1.1335 in the Asian session to a high of 1.1399 before retracing some of its gains.
The currency pair’s rally was largely triggered by news that the Chinese vice minister of commerce will be heading to the US in late August to resume trade talks. The news ignited the risk-on sentiment in the markets, which boosted riskier currencies such as the euro. The currency pair had a negative reaction to the release of the German wholesale price index by the Federal Statistical Office earlier today. The pair also declined after the release of the Eurozone trade balance data by Eurostat despite the print coming in at â¬22.5 billion versus the expected â¬16.5 billion.
The news of the resumption of trade talks had a negative impact on the greenback as tracked by the US Dollar Index, which dropped from year-to-date highs near the 97.00 level. Thus, the US dollar lost ground against most of its trading peers.
The currency pair’s future performance is likely to be affected by the release of US housing starts, jobless claims, and the Philadelphia Fed manufacturing index.
The EUR/USD currency pair was trading at 1.1366 as at 10:33 GMT having dropped from a high of 1.1399. The EUR/JPY currency pair was trading at 126.01 having rallied from a low of 125.28.
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