The euro today rallied to its daily highs backed by US dollar weakness accompanied the release of weak US manufacturing data. The EUR/USD currency pair later fell as demand for the safe haven greenback rose during the American session and the ECB Forum on Central Banking in Sintra, Portugal.
The EUR/USD currency pair today rallied from a low of 1.1203 in the early European session to a high of 1.1247 in the early American session before retracing most of its gains.
The currency pair opened today’s session trading with a bearish bias as the rising trade tensions between China and the US weighed on investor risk sentiment. China announced an investigation into FedEx on Sunday over Huawei’s misdirected mail, which favored the greenback as investors bought it due to its safe-haven status. The pair dipped lower following the release of the eurozone labour costs for Q1 by Eurostat. The pair later rallied higher following the release of the low-impact German Buba monthly report. The pair’s rally extended into the mid-European session as market sentiment shifted in favor of riskier assets such as the single currency.
The release of the disappointing New York Empire State Manufacturing Index for June contributed to the pair’s rally to its daily high. The manufacturing gauge contracted by 8.6 versus the expected expansion of 10. The pair fell shortly afterward as the greenback rallied higher.
The currency pair’s future performance is likely to be affected by the release of Mario Draghi‘s speech tomorrow and multiple eurozone releases.
The EUR/USD currency pair was trading at 1.1218 as at 18:40 GMT having fallen from a high of 1.1247. The EUR/JPY currency pair was trading at 121.80 having dropped from a high of 122.12.
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