Euro Rallies to New 32-Month Highs Against Dollar, Later Falls

The euro today briefly rallied higher against the dollar touching 32-month highs before reversing course and heading lower as the greenback inched higher. The EUR/USD currency pair fell despite the release of mixed data from across the euro area as Hungary continues to oppose the European Union budget.
The  EUR/USD currency pair rallied to a high of 1.2139 in the early Frankfurt session before giving up its gains and dropping to a low of 1.2101 shortly thereafter and was still lower for the day at the time of writing.
The currency pair headed higher today largely boosted by the positive investor sentiment amid a mixed bag of PMI releases from Markit Economics. The release of the disappointing Markit Germany services and composite PMIs for November drove the pair lower. Germany’s services PMI fell 0.2 to 46, while the composite PMI came in at 51.7 versus the expected 52. The upbeat Markit Eurozone services PMI, which came in at 41.7 versus consensus estimates of 41.3 had a muted impact on the pair. The positive Markit France Services PMI, which came in at 38.8 beating analysts estimates set at 38 also did not move the pair.
The euro recouped some of its losses following the release of the eurozone retail sales report for October. According to Eurostat, the region’s retail sales grew 1.8% in October beating consensus estimates of a 0.8% expansion. Rising tensions between China and the US weighed on the euro.
The currency pair’s future performance is likely to be affected by tomorrow’s US non-farm payrolls and German factory data.
The EUR/USD currency pair was trading at 1.2116 as at 11:07 GMT having dropped from a high of 1.2139. The EUR/JPY currency pair was trading at 126.35 having fallen from a high of 126.65.
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