The euro today rallied to new daily highs breaking out of a 3-day losing streak as markets reacted to Jerome Powell’s dovish comments during his testimony before Congress. The EUR/USD currency pair performance today was largely driven by investor sentiment and US dollar dynamics due to the empty European dockets.
The EUR/USD currency pair today rallied from an opening low of 1.1202 to a high of 1.1263 in the American session and was trading near these highs at the time of writing.
The currency pair opened today’s session trading under significant selling pressure as investors reacted to the falling German 10-year bund yields that recently fell below the European Central Bank‘s lending rate. The economic slowdown being witnessed across the euro area and the rising possibility of a return to quantitative easing by the ECB also weighed on the pair. The pair rallied slightly in the early European session as German bond yields improved as the French and Italian industrial activity reports beat expectations. The pair fell shortly after this rally.
The pair rallied to its daily highs as Fed Chair Jerome Powell testified before the House Financial Services Committee. Powell said that inflation levels could stay at subdued levels for longer than expected and global trade uncertainties could affect the US economy. He basically confirmed the Fed’s willingness to cut interest rates in future.
The currency pair’s short-term performance is likely to be affected by the release of the FOMC minutes at 18:00 GMT.
The EUR/USD currency pair was trading at 1.1253 as at 17:08 GMT having risen from a low of 1.1202. The EUR/JPY currency pair was trading at 122.08 having dropped from a high of 122.32.
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