The euro today rallied higher against the US dollar in the mid-European session following rumors that the US Federal Reserve would pause its rate hikes in Spring 2019. The euro had rallied higher in the early European session after Italy’s Deputy Prime Minister Matteo Salvini teased that his government was willing to make revisions to its 2019 budget.
The EUR/USD currency pair today rallied from a low of 1.1363 to a high of 1.1425 before retracing some of its gains.
The currency pair traded in a tight consolidative range during the Asian session as most analysts expected the pair to head lower following yesterday’s massive drop. However, the pair rallied higher in the early European session given the rally in Italian bond yields and the recovery witnessed across most European exchanges. The currency pair rallied higher after the European Commission rejected the Italian budget proposals in the mid-European session and recommended disciplinary measures against the country. The lower demand for the US dollar due to the risk-on sentiment caused the US Dollar Index to hit a low of 96.50, which boosted the currency pair.
The currency pair headed lower from the early American session despite the release of disappointing US durable goods orders by the Census Bureau. The initial jobless claims data released by the Department of Labor also missed expectations, but had a muted impact on the pair.
The pair’s future performance is likely to be influenced by tomorrow’s ECB meeting minutes given the empty US dockets.
The EUR/USD currency pair was trading at 1.1395 as at 17:48 GMT having rallied from a low of 1.1363. The EUR/JPY currency pair was trading at 128.83 having risen from a low of 128.13.
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