Euro Trades Sideways as Investors Ponder US-China Interim Deal

The euro today cooled off slightly after posting gains against the US dollar for the past three days as investors digested the impact of Friday’s US-China handshake deal. The EUR/USD currency pair fell to its daily lows after the release of weak German wholesale prices data before rallying higher shortly afterwards.
The EUR/USD currency pair today fell to a daily low of 1.1013 in the early European session before rallying to a high of 1.1042 then retracing its gains to trade sideways.
The currency pair was under selling pressure from the start of today’s session amid a healthy investor appetite for the greenback. The pair’s pullback was initially driven by gains made by the US Dollar Index, which hit a high of 98.53 today. The fact that US markets were closed today for the Columbus Day celebrations contributed significantly to the subdued action in the world’s most liquid currency pair. The interim trade deal negotiated by Chinese negotiators led by Vice Premier Liu He late Friday also contributed to the muted action. The pair rallied on the mixed eurozone industrial production report released by Eurostat.
Many remain sceptical that the interim deal will lead to an eventual resolution of the US-China trade war given President Donald Trump erratic actions regarding the issue. However, the deal helped avoid the imposition of additional US tariffs on Chinese imports scheduled for Tuesday.
The currency pair’s future performance is likely to be affected by geopolitical events and tomorrow’s German ZEW survey data.
The EUR/USD currency pair was trading at 1.1023 as at 20:22 GMT having fallen from a high of 1.1042. The EUR/JPY currency pair was trading at 119.49 having risen from a low of 119.19.

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