The euro today surged against the dollar boosted by the upbeat German Q3 GDP report released early in the European session and positive investor sentiment. The EUR/USD currency pair later fell as the dollar recovered and printed new daily highs before recouping most of its losses during the American session.
The EUR/USD currency pair today rallied from an initial low of 1.1838 in the Asian market to a high of 1.1894 in the early Frankfurt session before falling back to its daily lows and rallying once more.
The risk-on market environment drove the currency pair initial rally as investors cheered news that the General Services Administration had initiated the transition of power to President-elect Joe Biden. The release of the upbeat German Q3 GDP report also contributed to the pair’s rally. According to the Federal Statistical Office, Germany’s GDP grew 8.5% beating consensus estimates of 8.2%. The release of the in-line German IFO business climate index, which met expectations set at 90.7 also drove the pair higher. The current assessments print was better than expected.
The release of the disappointing US Richmond Fed Manufacturing Index contributed to the pair’s second rally. Dovish speeches by European Central Bank policymakers Isabel Schnabel and Olli Rehn making a case for more stimulus drove the pair lower before its recovery.
The currency pair’s future performance is likely to be affected by tomorrow’s multiple US reports given the empty European dockets.
The EUR/USD currency pair was trading at 1.1881 as at 18:50 GMT having rallied from a low of 1.1838. The EUR/JPY currency pair was trading at 124.19 having risen from a low of 123.66.
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