Euro Rallies Against Dollar, Later Falls on Dovish Sentiment

The euro today extended its losing trend against the much stronger US dollar driven by the release of mostly negative euro area PMI prints by Markit Economics. The EUR/USD currency pair today fell driven by the massive demand for the greenback amid fears that the rising coronavirus cases would derail the global economy.
The EUR/USD currency pair today hit a low of 1.1672 in the early Frankfurt session before rallying to a high of 1.1718, then falling back to its daily lows in the early American session. 
The pair’s initial rally was field by positive investor sentiment coupled with comments from the ECB that it was watching the euro’s exchange rate. The release of the German GfK consumer confidence survey for August could not stop the pair’s rally. The release of the upbeat Markit Germany manufacturing PMI for September, which came in at 56.6 versus the expected 52.5 boosted the pair. However, the German services PMI missed consensus estimates. The Markit eurozone Services PMI also missed expectations, while the manufacturing PMI print beat analysts estimates. A similar trend was repeated in French manufacturing and services PMIs.
The dollar’s rally was a significant driver behind the pair’s decline as tracked by the US Dollar Index, which hit a high of– today. The pair fell below its initial lows as the Fed chairman Jerome Powell testified before the House Select Committee.
The currency pair’s future performance is likely to be affected by tomorrow’s German IFO survey data.
The EUR/USD currency pair was trading at 1.1678 as at 15:02 GMT, having fallen from a high of 1.1718. The EUR/JPY currency pair was trading at 122.93, having risen from a low of 122.57.
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