The euro today rallied for the third straight session against the US dollar as investors reacted to the mixed US inflation data released today. The EUR/USD currency pair’s rally was further boosted by Brexit developments as the EU and the UK agreed to a raft of joint declarations on the Irish backstop issue.
The EUR/USD currency pair today rallied from a low of 1.1247 to a high of 1.1285 following the weak US CPI data and the Brexit headlines.
The currency pair rallied higher in the late Asian session driven largely by improved investor risk sentiment. The pair rallied despite the growing yield differential between the German 10-year bond yields and the US 10-year Treasury bond yields, which should have triggered a decline. The rally seemed to be driven by investor hopes that the EU and the UK would reach an improved Brexit deal as the UK Prime Minister Theresa May engaged in talks with the European Parliament. The PM was accompanied by Brexit Minister Steven Barclay in an 11-hour meeting that resulted in the deal presented to the House of Commons today.
The mixed reaction to the deal by UK leaders caused the pair to fall, but the disappointing US CPI data for February released by the Bureau of Labor Statistics triggered the pair’s second rally.
The pair’s short-term performance is likely to be influenced by the outcome of the ‘UK parliament’s meaningful vote’ scheduled for 19:00 GMT today.
The EUR/USD currency pair was trading at 1.1269 as at 15:04 GMT having dropped from a high of 1.1285. The EUR/JPY currency pair was trading at 125.37 having risen from a low of 125.06.
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