The euro today rallied to multi-year highs against the dollar boosted by the positive investor risk sentiment amid heightened optimism about the global economic recovery. The EUR/USD currency pair’s rallied to highs last seen in Apil 2018 boosted by the dollar’s weakness and mixed eurozone macro releases.
The EUR/USD currency pair today rallied from an opening low of 1.1937 in the Australian market to a high of 1.2053 in the American session and was trading near these highs at the time of writing.
The currency pair’s initial rally was boosted by the risk-on mood prevalent in the markets as investors anticipate multiple positive events, including Joe Biden’s incoming administration. The release of the upbeat German unemployment rate by the Federal Statistical Office boosted the pair as the print fell to 6.1% versus consensus estimates of 6.3%. The release of the downbeat Markit Germany Manufacturing PMI, which came in at 57.8 missing analysts estimate set at 57.9 had a muted impact on the pair. The upbeat Eurozone consumer price index report released by Eurostat contributed to the pair’s gains.
The weak Italian Q3 GDP data released by Istat had a minimal impact on the pair. The release of the disappointing US ISM manufacturing PMI data, which came in at 48.4 missing expectations set at 51.4 drove the pair to its multi-year highs. The US Dollar Index crashed to 91.26 fueling the pair’s rally.
The currency pair’s future performance is likely to be affected by US dollar dynamics and investor sentiment.
The EUR/USD currency pair was trading at 1.2047 as at 18:25 GMT having rallied from a low of 1.1937. The EUR/JPY currency pair was trading at 125.73 having risen from a low of 124.50.Â
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