The euro today rallied higher against the US dollar driven by the markets higher risk appetite after the US Senate agreed on a multi-trillion stimulus package. The EUR/USD currency pair’s gains were also helped in part by the easing demand for the US dollar after the Federal Reserve provided swap lines for the currency.
The EUR/USD currency pair today rallied from an initial low of 1.0760 in the Asian session to a high of 1.0849 in the mid-European session but had given up most of its gains at the time of writing.
The currency pair’s gains were driven by the risk-on investor sentiment driven by the approval of the multi-trillion-dollar US stimulus package. Investors across the world were relieved by the deal as evidenced by the overnight rally in Asian equity markets and the rally by European stocks at the start of today’s session. The release of the disappointing German IFO business climate index for March, which came in at 86.1 missing analysts’ expectations set at 87.7, did not affect the pair negatively. The IFO current assessment print also missed consensus estimates but had a muted impact on the pair.
The high availability of US dollars in the European markets also boosted the pair as the US Dollar Index fell to a low of 101.16 earlier today. However, this may not last long given that the Bank of Japan reported high demand for dollars among Japanese banks.
The currency pair’s future performance is likely to be affected by geopolitical events and the US durable goods orders set for release later today.
The EUR/USD currency pair was trading at 1.0826 as at 11:35 GMT having risen from a low of 1.0760. The EUR/JPY currency pair was trading at 120.41 having rallied from a low of 119.42.
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