The euro today rallied against the US dollar from the Asian session and maintained its gains into the European session amid minimal holiday trading. However, the single currency dropped slightly following the release of the disappointing German consumer inflation data in the early American session.
The EUR/USD currency pair today rallied from an opening and intra-day low of 1.1429 to a high of 1.1473 before dropping slightly later in the session.
The currency pair’s initial rally was largely due to the weaker US dollar as tracked by the US Dollar Index, which dropped to a weekly low of 96.19. The ongoing partial US government shutdown and the trade tensions between the US and China weighed heavily on the greenback, which caused the euro to rally. However, the release of the weak German consumer price index data by the Federal Statistical Office in the early American session triggered a slight decline by the pair. The preliminary German CPI print for December came in at 0.1%, which translated into an annualized 1.7%; both prints missed expectations by 0.2%.
Despite the fact that American equity markets led by the DJIA are expected to open higher, investors are still quite bearish towards the greenback. This is reflected by the fact that investors are currently pricing in only one rate hike by the Federal Reserve next year, despite the Fed’s plan for two rate hikes.
The currency pair’s performance over the upcoming weekend is likely to be influenced by investor sentiment and geopolitical events.
The EUR/USD currency pair was trading at 1.1464 as at 14:37 GMT having rallied from a low of 1.1429. The EUR/JPY currency pair was trading at 126.45 having fallen from a high of 127.01.
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