Euro Falls Then Rallies Based on US Dollar Dynamics and Sentiment

The euro today fell against the US dollar earlier in the session before rallying higher later with its movements primarily driven by the greenback’s price dynamics. The EUR/USD currency pair’s was further encouraged by the positive investor sentiment around the €750 billion EU recovery fund, which was agreed on by European leaders at their summit.
The EUR/USD currency pair today fell to a low of 1.1540 in the mid-European session before rallying to a high of 1.1626 in the American market before giving up most of its gains to trade almost flat at the time of writing.
The currency pair’s performance today was the mirror opposite of the dollar as tracked by the US Dollar Index. The pair fell as the dollar rallied despite the release of the positive German GfK consumer confidence survey, which came in at -3.0 versus the expected -5. The single currency did not rise on the upbeat speech given by the European Central Bank‘s Vice President Luis De Guindos who said that the bank intends to purchase €120 billion of Spanish government debt.
The pair later reversed course and headed higher as the greenback fell. The release of weak flash eurozone consumer confidence print for July by the European Commission did not derail the single currency’s rise. However, it trimmed its gains later as the greenback recovered and rallied yet again. 
The currency pair’s future performance is likely to be affected by tomorrow’s Markit PMI releases from both the European and US dockets.
The EUR/USD currency pair was trading at 1.1594 as at 20:14 GMT, having rallied from a low of 1.1540. The EUR/JPY currency pair was trading at 123.88, having risen from a low of 123.70.
If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

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