The euro today rallied higher against the US dollar from the early European session largely due to the massive pullback in global equity markets, which favored the single currency. The EUR/USD currency pair’s rally was further boosted by President Donald Trump‘s criticism of the Fed’s monetary policy position, which also contributed to the greenback’s weakness.
The EUR/USD currency pair today rallied to a high of 1.1599 almost breaching the crucial 1.1600 level before retracing most of its gains.
The massive rout in global equity markets was the main trigger that rescued the currency pair from its Asian session slump by weakening the greenback. The single currency also benefited from the fact that most of the budget and political headlines coming out of Italy were already priced into the pair. Yesterday’s sell-off in US equity markets and the rising US 10-year Treasury yields also boosted the currency pair. The release of the European Central Bank minutes of the latest monetary policy meeting had a muted impact on the pair because it simply confirmed the bank’s timeline of raising rates in September/October 2019.
The currency pair rallied higher after the release of the US consumer price index data by the Bureau of Labor Statistics as the print missed expectations. The pair’s rally ran out of steam shortly thereafter and it started dropping as the greenback recovered.
The currency pair’s future performance is likely to be affected by geopolitical events as well as tomorrow’s German CPI data.
The EUR/USD currency pair was trading at 1.1568 as at 14:51 GMT having rallied from a low of 1.1530. The EUR/JPY currency pair was trading at 129.89 having risen from a low of 129.24.
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