The euro today rallied against the US dollar twice followed by quick retracements despite the upbeat investor risk appetite that boosted risk assets. The EUR/USD currency pair today rallied then gave up all its gains before rallying again as the bulls and bears fought for control amid mixed euro area macro prints.
The EUR/USD currency pair today rallied from a low of 1.1717 in the Australian market to a high of 1.1770 in the mid-European session. Still, it had two significant retracements recovering each time.
The heightened investor risk appetite drove the currency pair’s rally. The release of the disappointing Markit/BME Germany Manufacturing PMI, which came in at 56.4 versus the consensus estimate of 56.6 drove the pair lower. The upbeat Markit France Manufacturing PMI, which came in at 51.2 versus the expected 50.9 had no impact on the pair. The in-line Markit eurozone Manufacturing PMI, which was recorded at 53.7, also had a muted effect on the euro. The pair recovered and rallied higher after the release of the upbeat eurozone producer price index report for August by Eurostat. The in-line eurozone unemployment report also boosted the single currency.
The release of the upbeat US Personal consumption expenditure report coupled with the positive US initial jobless claims report drove the euro’s second decline, which was quickly followed by a rally.
The currency pair’s future performance is likely to be affected by tomorrow’s eurozone inflation data and US dollar dynamics.
The EUR/USD currency pair was trading at 1.1746 as at 18:49 GMT having risen from a low of 1.1717. The EUR/JPY currency pair was trading at 123.98 having rallied from a low of 123.61.
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