The euro today rallied higher against the US dollar driven by bullish investor sentiment amid hopes that a cure for the coronavirus was on the horizon. The EUR/USD currency pair initially fell as the greenback rallied before changing course and surging higher as risk-appetite improved.
The EUR/USD currency pair today fell to a low of 1.0812 in the early European session before rallying to a high of 1.0892 in the American session but was off these highs at the time of writing.
The currency pair’s rally coincided with the opening of the European session as equity markets across the euro area posted gains. These gains were attributed to a report suggesting that Remdesivir, a drug developed by Gilead Sciences, was treating COVID-19 patients. The news led to a relief rally among riskier assets such as the euro and global equities. The release of mostly in-line eurozone consumer price index report for February by Eurostat also boosted the pair. The headline inflation print came in at 0.5%, while the core CPI print came in at 1.1% as both prints met expectations.
The pair’s gains were capped by the disagreement on coronabonds among EU finance ministers. The greenback’s sell-off as tracked by the US Dollar Index, which hit a low of 99.62 earlier today also contributed to the pair’s rally. The fact that some European countries such as Germany are relaxing lockdown measures also boosted the pair.
The currency pair’s performance over the upcoming weekend is likely to be affected by geopolitical events.
The EUR/USD currency pair was trading at 1.0867 as at 16:55 GMT having rallied from a low of 1.0812. The EUR/JPY currency pair was trading at 116.93 having risen from a low of 116.62.
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