Euro Rallies on US Dollar Selloff Ignoring Trade Jitters, Later Drops

The euro today spiked to new weekly highs against the US dollar in the early American session as the greenback dropped significantly against its peers. The EUR/USD currency pair later retraced some of its gains, but remained in positive territory as high-level US-China trade talks resumed.
The EUR/USD currency pair today rallied from a low of 1.1172 in the European session to a high of 1.1250 in the American session before retracing some of its gains.
The currency pair was trading in a sideways range for most of today’s session marking a fourth consecutive day of range-bound action this week. The pair’s gains were capped by the looming trade war fears as President Donald Trump said that China broke the trade deal. The Chinese government reiterated that it would do everything in its power to defend its legal rights and obligations as a country. The standoff between the world’s two largest countries continued to dampen investor risk sentiment. The pair rallied higher as the greenback sold off as tracked by the US Dollar Index, which hit a low of 97.24 today.
The US dollar fell as the 10-year Treasury bond yields contracted as tomorrow’s additional US tariffs loom. The speech by Fed Chairman Jerome Powell had a muted impact on the pair as did the disappointing initial jobless claims data and the trade balance data.
The pair’s future performance is likely to be affected by trade headlines and macro releases from the European and US dockets.
The EUR/USD currency pair was trading at 1.1219 as at 16:55 GMT having dropped from a high of 1.1250. The EUR/JPY currency pair was trading at 123.14 having risen from a low of 122.47.

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