The euro today rallied against the US dollar following the release of disappointing US manufacturing PMI in the American session. The EUR/USD currency pair kept up it bullish momentum from Friday as markets remained worried about the inverted US yield curves and the possibility of a Fed rate cut.
The EUR/USD currency pair today rallied from a low of 1.1159 in the early European session to a high of 1.1244 in the American session and was near these highs at the time of writing.
The currency pair opened today’s session with a bullish bias despite the prevailing risk averse market sentiment amid an uncertain global outlook. Markets are concerned about the possible US tariffs on Mexican imports as President Donald Trump proves that he is willing to push the limits of his trade war. The pair dipped slightly in the Asian session, but quickly recovered following the release of the in-line Markit/BME Germany manufacturing PMI for May. The pair was also boosted by the Markit eurozone manufacturing PMI, which also met expectations.
The currency pair exploded higher in the American session following the release of the disappointing US ISM manufacturing PMI for May, which unexpectedly contracted to 52.1 from the previous 52.8 print missing expectations set at 53.0. The pair kept rallying despite the widening US-German yield spread as trade fears gripped the market.
The currency pair’s future performance is likely to be affected by tomorrow’s eurozone CPI data and US factory orders.
The EUR/USD currency pair was trading at 1.1242 as at 18:18 GMT having risen from a low of 1.1159. The EUR/JPY currency pair was trading at 121.57 having rallied from a low of 120.75.
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