The euro today rallied higher against the US dollar despite the lack of any major economic releases from the Eurozone, while US markets remained closed. The euro’s rally was largely triggered by the aggressive selling of the US dollar across the board.
The EUR/USD currency pair gained over 100 points to rally from a low of 1.2187 to hit a high of 1.2296 in the mid-European session.
The euro carried over Friday’s massive rally, which was triggered by the announcement that major German political parties were about to finalize talks on forming a coalition government. The news boosted the euro as it was seen as evidence that Angela Merkel would remain in power, which is good for the single currency’s continued stability. The currency pair also rallied higher after the release of positive Eurozone trade balance data for November by Eurostat, which came in at â¬26.3 billion, which was higher than the previous â¬18.9 billion.
Given that US markets are closed in celebration of Martin Luther King Jr. Day, the greenback had little support in terms of releases from the US docket. The selling pressure on the US dollar served to drive the US Dollar Index to a new low of 90.28 today. Investors were selling the greenback as they expect monetary tightening in the Eurozone, UK and Japan.
The currency pair’s future performance is likely to be affected by tomorrow’s German CPI data and US Empire manufacturing print.
The EUR/USD currency pair was trading at 1.2279 as at 13:20 GMT having rallied from a low of 1.2187. The EUR/JPY currency pair was trading at 135.82 having risen from a low of 135.00 earlier today.
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