Euro Rallies on Coronavirus Vaccine News, Later Falls on Upbeat US PMI

The euro today rallied higher against the US dollar in the first half of today’s session boosted by investor optimism about a potential coronavirus vaccine. The EUR/USD currency pair later reversed course during the American session and turned negative for the day on the upbeat US PMI data, which boosted the dollar.
The EUR/USD currency pair today rallied to a high of 1.1905 in the mid-European session before reversing course and falling to a low of 1.1800 during the American market.
The currency pair’s initial rally was boosted by news that AstraZeneca’s COVID-19 vaccine had proven 90% effective in clinical trials. The vaccine developed in collaboration with Oxford University is the third such treatment following similar announcements from Moderna and Pfizer/BionTech. The release of the upbeat Markit preliminary Germany Manufacturing PMI, which came in at 57.9 versus the expected 56.5 also boosted the pair. The upbeat Markit Eurozone Manufacturing PMI also boosted the pair. However, the services PMIs from Germany and the broader euro area were below expectations limiting the euro’s gains. A speech by the ECB’s Isabel Schnabel had a muted impact on the single currency.
The fibre crashed to its daily lows following the release of the upbeat Markit Flash US Manufacturing PMI, which came in at 56.7 beating analysts estimates set at 53. The same was true of the US Services PMI, which came in at 57.7 versus consensus estimates of 55.3.
The currency pair’s future performance is likely to be affected by tomorrow’s German GDP data and IFO expectations survey.
The EUR/USD currency pair was trading at 1.1837 as at 17:45 GMT having fallen from a high of 1.1905. The EUR/JPY currency pair was trading at 123.48 having rallied from a low of 123.11.
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