The euro today rallied briefly against the US dollar after the release of weak consumer sentiment data by the University of Michigan. This was the second rally by the single currency today as the euro had rallied against the US dollar earlier in the European session, but had given up most of its gains.
The EUR/USD currency pair rallied by over 50 points from its daily lows to hit a high of 1.1680, but quickly retraced most of its gains.
The empty European docket for today’s session meant that the primary drivers behind the currency pair’s movement were developments in the US docket. The euro was largely stronger than the greenback because of the political uncertainty in the USA regarding the Republican tax reform plan. A member of the European Central Bank‘s governing council, Ewald Nowtony, had stated earlier that the bank could cease its bond-buying program in September 2018 if economic conditions remained favorable. This boosted the single currency early in the European session.
The release of the University of Michigan survey of consumers early in the American session triggered the currency pair’s second rally. The consumer sentiment was recorded at 97.8, which was lower than the market consensus estimate of 100.9, and the previous figure of 100.7. Other key metrics such as the current conditions and future expectations also disappointed.
Given the upcoming weekend, the currency pair’s short-term performance is likely to be affected by political events in the USA and in Europe.
The EUR/USD currency pair was trading at 1.1656 as at 17:07 GMT having declined from a daily high of 1.1680. The EUR/JPY currency pair was trading at 132.30 having risen from a low of 131.93 earlier today.
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