The euro today rallied higher against the US dollar driven by positive market sentiment backed by investors’ expectations of a future US-China trade deal. However, the single currency’s rally was significantly hampered by the ongoing standoff between the EU and Italy regarding its 2019 budget plans.
The EUR/USD currency pair today rallied from a low of 1.1219 to a high of 1.1271 in the early American session.
The currency pair’s initial rally was largely supported by investor optimism regarding the potential outcome of the latest US-China trade talks. Most investors cannot wait for the resolution of the Sino-US trade war that has derailed global economic growth. The release of the German consumer price index data for October by the Federal Statistical Office in the early European session had a muted impact on the currency pair. The monthly CPI print came in at 0.2%, which translated into an annualized 2.5%, as both prints met expectations. The pair rallied higher after the release of the German ZEW survey data for October, which had mixed results. The ZEW survey current situation data missed expectations, while the economic sentiment survey and the economic expectations data were within expectations.
The currency pair’s performance was further weighed down by Italy’s defiance towards the European Union given that today was the deadline for the country to submit a revised draft of its 2019 budget.
The currency pair’s short-term performance is likely to be influenced by developments in the Italy-EU standoff.
The EUR/USD currency pair was trading at 1.1269 as at 14:41 GMT having risen from a low of 1.1219. The EUR/JPY currency pair was trading at 128.43 having rallied from a low of 127.48.
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