The euro today rallied against the US dollar amid heightened trade tensions between the US and China, which triggered a global stock market sell-off. The EUR/USD currency pair rallied higher as investors sold the greenback and bought the single currency given the significant risks facing the United States.
The EUR/USD currency pair today rallied from an intra-day low of 1.1179 to a high of 1.1242 in the American session before retracing some of its gains.
The currency pair opened today’s session trading with a bearish bias following yesterday’s mixed performance, which resulted in a daily Doji candle. The pair extended its bearish slide following the release of the disappointing German industrial production data for June. According to the Federal Statistical Office, Germany’s industrial production fell 1.5% beating consensus estimates of a 0.5% decline. The bearish momentum lasted throughout the Asian session but reversed in the early European session as a rally got underway. The pair rallied higher as the US-German yield spread shrunk to 220 basis points, a level last seen in March 2018. The trade tensions saw investors dump the US dollar in favour of safe-haven currencies such as the yen.
The pair rallied higher in the early American session as the US Dollar Index hit a low of 97.32. The lack of any major US releases left the dollar susceptible to the trade headlines that were dominated by President Donald Trump’s comments.
The currency pair’s future performance is likely to be affected by tomorrow’s ECB economic bulletin and trade headlines.
The EUR/USD currency pair was trading at 1.1217 as at 18:22 GMT having risen from a low of 1.1179. The EUR/JPY currency pair was trading at 118.88 having risen from a low of 118.45.
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