Euro Rallies Against the Dollar Ignores Weak Eurozone GDP Data

The euro today rallied to new weekly highs against the US dollar despite multiple disappointing macro reports from across the euro area. The weak dollar primarily drove the EUR/USD currency pair’s rally as US Treasury yields fell dragging the greenback lower.
The EUR/USD currency pair today rallied from a low of 1.1017 in the early European session to a high of 1.1067 in the American session and was headed higher at the time of writing.
The currency pair headed lower during the Asian session driven by the risk-averse market sentiment but turned higher in the European session. The release of disappointing German retail sales data for December by the Federal Statistical Office had a muted impact on the currency pair. German retail sales contracted by 3.3% missing expectations of a 0.5% decline by a wide margin. The pair kept rallying despite the flash Italian Q4 GDP report released by Istat missing expectations by 0.1%. The single currency extended its gains despite the release of weak eurozone preliminary GDP report by Eurostat, which also missed expectations by 0.1%. The disappointing eurozone flash inflation data for January also had a muted impact on the currency pair.
The pair kept rallying after the release of mixed US personal consumption expenditure report by the Bureau of Economic Analysis. The weak US ISM Chicago Business Barometer, which missed expectations also boosted the pair. The fiber fell slightly on the upbeat UoM consumer sentiment survey for January.
The currency pair’s performance is likely to be driven by geopolitical events over the upcoming weekend.
The EUR/USD currency pair was trading at 1.1059 as at 15:24 GMT having rallied from a low of 1.1017. The EUR/JPY currency pair was trading at 120.23 having risen from a low of 120.08.

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