Euro Falls From 3-Week Highs, Later Recovers to Trade Flat

The euro today rallied to new 3-wek highs earlier in the session driven by improved risk sentiment and broad US dollar weakness before retreating later in the session. The EUR/USD currency pair fell from its highs as the European session progressed driven by the greenback’s resurgence and the disappointing eurozone employment and inflation data.
The EUR/USD currency pair today rallied to a high of 1.1277 before falling to a low of 1.1225, but had retraced some of its losses at the time of writing.
The currency pair opened today’s session with a bullish bias boosted by the improved market risk sentiment to hit the new 3-week highs. However, the pair soon fell following the release of disappointing eurozone consumer price index data by Eurostat in the early European session. The final headline eurozone CPI data for May came in at an annualized 1.2%, while the core CPI print was 0.8% as both prints missed expectations by 0.1%. The eurozone unemployment rate for April was 7.6%, which was lower than the consensus estimate of 7.7% dragging the pair lower.
The currency pair later rallied higher following the speech by U.S. Federal Reserve chairman Jerome Powell, which confirmed that the Fed was adopting a wait-and-see attitude regarding future rate hikes. The release of weak U.S. factory orders for April also contributed to the currency pair’s recovery.
The currency pair’s future performance is likely to be influenced by tomorrow’s multiple Markit PMI releases for both the European and US dockets.
The EUR/USD currency pair was trading at 1.1255 as at 17:54 GMT having recovered from a low of 1.1225. The EUR/JPY currency pair was trading at 121.66 having risen from a low of 121.28.

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