The euro today rallied higher against the US dollar driven by positive investor sentiment as European countries cautiously move forward with the reopening of their economies. The EUR/USD currency pair today benefitted from the greenback’s overall weakness recouping yesterday’s losses and printing new weekly highs.
The EUR/USD currency pair today rallied from a low of 1.0784 to a high of 1.0885 in a 100 pip move before giving up some of its gains to trade off the highs at the time of writing.
The currency pair’s rally was mostly attributed to the efforts taken by most European governments to reopen their economies in the recent past. Countries such as Germany, Italy, France and Spain have started easing lockdown restrictions allowing businesses to reopen. Investors appear hopeful that European countries have put the worst behind them and the easing measures will rejuvenate the affected countries. The lack of fundamental releases from the European docket left the single currency’s performance in the hands of traders for most of today’s session. The greenback’s weakness as tracked by the US Dollar Index, which fell to a low of 99.66 today, also contributed to the pair’s rally.
The release of the US consumer price index report for April by the Bureau of Labor Statistics drove the dollar lower. The headline CPI print fell 0.8%, which was in line with analysts’ estimates, but the core CPI print came in at -0.4% versus the consensus estimates of -0.2%.
The currency pair’s future performance is likely to be affected by tomorrow’s eurozone industrial production data and geopolitical events.
The EUR/USD currency pair was trading at 1.0853 as at 19:04 GMT having rallied from a low of 1.0784. The EUR/JPY currency pair was trading at 116.43 having risen from a low of 115.95.
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