The EUR/USD currency pair rallied briefly during the early European session despite the announcement by former French premier, Alain Juppe, that he won’t run for president. The currency pair’s rally was also supported by the weaker US dollar, but the greenback later rallied higher.
The currency pair’s brief rally occurred around 8:00 GMT after which the currency pair retraced all its gains as news emerged that Greece’s economy had contracted in the last quarter of 2016.
The currency pair’s brief rally occurred early in the Europen session as the greenback opened today’s session much weaker than the euro as the US Dollar Index hit a daily low of 101.22. However, the political uncertainty in Europe occassioned by the French election had a negative impact on the euro and increased downward pressure on the currency pair.
The euro was also affected by the uncertainty around the Greek economy as news released today indicated that Greece’s economy had contracted by 1.2% in the fourth quarter of 2016. It is highly likely that the country will default on its debt come July if the country’s bonds are not included in the European Central Bank‘s quantitative easing program.
The currency pair is likely to be affected by the ECB’s monetary policy decision meeting scheduled for Thursday this week.
The EUR/USD was trading at 1.0587 as at 17:22 GMT having hit a daily high of 1.0639 at the opening of the European session. The EUR/GBP also had a similar rally to hit a high of 0.8669 early today, before retarcing its gains to trade at 0.8651.
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