The euro today rallied from 5-week lows hit yesterday following the ECB monetary policy decision and the balanced policy stance outlined by Mario Draghi. The EUR/USD currency pair’s rally started in the Asian session driven by a shift in investor sentiment and also as a pullback from yesterday’s crash.
The EUR/USD currency pair today rallied from an opening low of 1.1304 to hit a high of 1.1350 in the mid-European session.
The currency pair’s initial rally was caused by an upbeat investor risk sentiment in the Asian session an Asian equity markets posted gains. However, the rally was quite subdued as investors were worried about the conflicting reports regarding the Sino-US trade negotiations, which dampened investors’ risk appetite. Yesterday’s European Central Bank dovish rate decision also weighed on the single currency, thus limiting its gains. The release of the mixed German IFO data also affected the pair’s upward momentum. The German IFO business climate index came in at 99.1 missing consensus estimates set at 100.6. The IFO expectations print also missed expectations by coming in at 94.2 versus the expected 97.0.
The IFO current assessment data was the only positive print as it was recorded at 104.3 beating expectations by 0.1. The currency pair remained immune to the dovish ECB survey of professional forecasters, which indicated that the group was predicting lower GDP growth and inflation figures this year.
The currency pair’s short-term performance is likely to be influenced by geopolitical events and investor risk sentiment.
The EUR/USD currency pair was trading at 1.1343 as at 11:52 GMT having rallied from a low of 1.1304. The EUR/JPY currency pair was trading at 124.58 having risen from a low of 123.91.
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