The euro today extended last week’s gains against the US dollar driven largely by positive investor sentiment given the lack of major releases from the European docket. The EUR/USD currency pair rallied to 2-week highs in the mid-European session before dropping lower as investors became wary of current geopolitical conditions.
The EUR/USD currency pair today rallied from an opening low of 1.1318 to a 2-week high of 1.1359 before hitting resistance and heading lower.
The pair’s rally was driven by investor optimism towards the single currency amid a lack of any major fundamental releases from the euro area. Investors were optimistic about the euro maybe due to the merger talks announced by Deutsche Bank and Commerzbank. These are the two largest German banks and a merger would be good for them amid the current tough operating conditions in Germany and the eurozone. The pair rallied slightly after the release of the positive eurozone trade balance data by Eurostat in the mid-European session.
The pair later headed lower amid the Brexit impasse in the UK as the British Prime Minister was yet to garner sufficient support for her Brexit deal. The lack of any progress in the US-China trade negotiations also affected the markets risk sentiment after the postponement of the Trump-Xi meeting scheduled fro April.
The currency pair’s future performance is likely to be affected by geopolitical events, tomorrow’s German ZEW survey, and the US factory orders data.
The EUR/USD currency pair was trading at 1.1329 as at 16:59 GMT having dropped from a high of 1.1359. The EUR/JPY currency pair was trading at 126.19 having fallen from a high of 126.69.
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