The euro today rallied to new 2-year highs against the US dollar mainly driven by the latter’s overall weakness as tracked by the US Dollar Index. The EUR/USD currency pair today hit a high of 1.1966, which was last seen in March 2018 driven by the bullish investor sentiment.
The EUR/USD currency pair today rallied from an opening low of 1.1874 to a 27-month high of 1.1966 before giving up some of its gains by the time of writing.
US dollar dynamics mostly drove the currency pair’s rally given the lack of any major releases from the European docket. The pair benefitted from the heightened investor risk appetite, and safe-haven flows into Gold, which crossed above the $2,000 level yet again. The dollar’s weakness was also fueled by the drop in US 10-year Treasury yields, which lost over 4% today, triggering a mass exit of investors. The pair later gave up some of its gains as investors took profits on their positions, but was still higher for the day.
The pair’s movements were barely affected by the release of the US building permits and housing starts report for July. According to the Census Bureau, the US issued 1.495 million building permits resulting in 1.496 million housing starts comfortably surpassing analysts’ expectations.
The currency pair’s future performance is likely to be affected by tomorrow’s eurozone CPI and US dollar dynamics.
The EUR/USD currency pair was trading at 1.1930 as at 18:26 GMT, having rallied from a low of 1.1874. The EUR/JPY currency pair was trading at 125.80, having risen from a low of 125.34.
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