Euro Halts Drop to Rally Higher on Upbeat German IFO Data

The euro today halted its slide against against the US dollar following the release of the upbeat German IFO business survey data in the early European session. The EUR/USD currency pair was under intense selling pressure today as the greenback recovered from Friday’s selloff, which was triggered by the Fed Chair Jerome Powell‘s dovish speech.
The EUR/USD currency pair today dropped from an opening high of 1.1645 to hit a low of 1.1594 before rallying higher on the IFO release.
The currency pair was on a downtrend from the Asian session fueled by the greenback’s recovery as tracked by the US Dollar Index. The greenback ended last week quite weak following Jerome Powell’s dovish speech at the Jackson Hole symposium where he outlined some conditions for future rate hikes. However, he also stated that inflation in the US was not accelerating and that the US economy was not overheating, which basically assured investors of a September rate hike. The release of the upbeat German IFO business survey data provided the currency pair with a lifeline and triggered a rally.
The headline business climate index came in at 103.8, which was much higher than the expected 101.8. The German IFO expectations met consensus estimates by coming in at 98.4, while the current assessment was better than expected at 106.4 versus the estimated 105.3.
The currency pair’s future performance is likely to be affected by tomorrow’s US advance goods trade balance data given the almost empty European dockets.
The EUR/USD currency pair was trading at 1.1635 as at 12:16 GMT having recovered from a low of 1.1594. The EUR/JPY currency pair was trading at 129.15 having dropped from a high of 129.58.

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