The euro today rallied higher against the US dollar as investors fled the greenback and US equity markets in favour of riskier assets such as the single currency. The EUR/USD currency pair today rallied above the crucial 1.1200 level as investors piled into the currency given the US dollar’s crash in the face of rising trade tensions.
The EUR/USD currency pair today rallied from an opening low of 1.1107 to a high of 1.1213 in the American session and was near these highs at the time of writing.
The currency pair opened today’s session trading with a bullish bias after President Donald Trump imposed additional tariffs on Chinese imports worth $300 billion. The single currency benefitted from investor fears that full-blown trade war was about to erupt as China promised to retaliate against the US tariffs. The pair rallied higher despite the release of Markit Germany services PMI, which came in at 54.5 versus the expected 55.4 print. The Markit eurozone services PMI also missed expectations by coming in at 53.2 versus the consensus estimate of 53.3. No negative Europen releases could derail the pair’s ascent as the greenback continued to fall.
The currency pair’s rally was boosted by China’s retaliation in the form of a devalued yuan and an immediate halt to the purchase of US agricultural produce. The release of the weak US ISM non-manufacturing/services composite also contributed to the pair’s rally.
The currency pair’s future performance is likely to be affected by tomorrow’s German factory orders and geopolitical events.
The EUR/USD currency pair was trading at 1.1206 as at 17:55 GMT having risen from a low of 1.1107. The EUR/JPY currency pair was trading at 118.84 having rallied from a low of 117.69.
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