Euro Rallies on Powell’s Testimony, Retreats on Upbeat US CPI Data

The euro today rallied higher in the Asian session as investors reacted to Jerome Powell‘s dovish comments during his testimony before Congress. The EUR/USD currency pair later fell from its daily highs in the American session following the release of upbeat US inflation data.
The EUR/USD currency pair today rallied to a high of 1.1285 in the mid-European session before falling to a low of 1.1246 in the American session and was trading near these lows at the time of writing.
The currency pair opened today’s session trading with a bearish bias as investors reacted to Powell’s dovish comments on Wednesday. The Fed Chair strongly hinted that he was ready to cut interest rates in order to boost the American economy, which was facing major global trade headwinds, and dealing with low inflation levels. The German CPI data for June released by the Federal Statistical Office also boosted the pair by meeting expectations. The CPI print came in at 0.3% translating into an annualized 1.6% in-line with consensus estimates. The release of the European Central Bank‘s account of monetary policy meeting also contributed to the pair’s rally.
The release of the US consumer price index report for June by the Bureau for Labor Statistics triggered the pair’s sustained decline as the prints beat expectations. The headline print came in at 0.01%, while the core print was recorded at 0.03%; both prints beat expectations by 0.01%.
The pair’s future performance is likely to be affected by tomorrow’s eurozone industrial production data.
The EUR/USD currency pair was trading at 1.1252 as at 17:21 GMT having fallen from a high of 1.1285. The EUR/JPY currency pair was trading at 122.07 having rallied from a low of 121.63.

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