Euro Rallies From Trading Range After ECB Decision, Later Declines

The euro today broke out of the range it was trading in for the earlier part of the session after the European Central Bank announced its monetary policy decision. The EUR/USD currency pair rallied higher after the ECB announcement where it maintained its current monetary policy direction as was expected.
The EUR/USD currency pair today rallied from a low of 1.1396 to a high of 1.1432 following the ECB decision before retracing all its gains and heading lower.
The currency pair was trading in a consolidative range since the start of today’s session, but rallied higher after the ECB decision. The ECB’s Governing Council left the interest rate on its main refinancing operations at 0.00%, while the marginal lending facility was maintained at 0.25%, and the deposit rate was left at -0.40%. These decisions were in line with investor expectations, which boosted the single currency. The pair later retraced some of its gains despite the ECB President Mario Draghi‘s hawkish comments at the accompanying press conference. Earlier today, the release of the disappointing German IFO business climate survey had a negative impact on the pair.
Several macro releases from the US docket by the Census Bureau including the advance goods trade balance and the durable goods orders had a muted impact on the currency pair.
The clash between the EU and Italy as well as tomorrow’s US GDP data are likely to influence the currency pair’s future performance.
The EUR/USD currency pair was trading at 1.1381 as at 13:55 GMT having dropped from a daily high of 1.1432. The EUR/JPY currency pair was trading at 128.07 having risen from a low of 127.48.

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