The euro today rallied higher against the much weaker US dollar largely driven by positive market sentiment and the upbeat German retail sales data. The improved market risk sentiment was supported by investors’ optimism regarding the 2-day high level US-China trade talks, which kicked off today.
The EUR/USD currency pair today rallied from an opening low of 1.1403 to a high of 1.1448 in the mid-European session.
Investor optimism towards the outcome of the 2-day Sino-US meeting was the main trigger behind the pair’s initial rally at the start of today’s session. The pair also rallied higher following the release of the German retail sales data for November by the Federal Statistical Office in the early European session. The retail sales came in at a monthly 1.4% versus the expected 0.3% print, while the annualized print recorded a 1.1% expansion as compared to the consensus estimate of a 0.9% contraction. The German factory orders data missed expectations by recording a 1.0% decline versus the expected 0.5% drop. The eurozone retail sales data released by Eurostat also boosted the pair by coming in at 0.6% in November versus the expected 0.1% print.
The currency pair was also boosted by the weaker US dollar following Friday’s dovish comments by the Fed Chair Jerome Powell. President Donald Trump‘s recent optimism towards the US-China trade talks boosted the markets risk sentiment, which favors the euro.
The pair’s future performance is likely to be affected by the release of the US ISM Non-manufacturing PMI later today.
The EUR/USD currency pair was trading at 1.1437 as at 11:39 GMT having rallied from a low of 1.1403. The EUR/JPY currency pair was trading at 123.93 having risen from a low of 123.42.
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