The euro today rallied to new highs against the US dollar for the fourth consecutive session boosted by investor optimism about the global economic recovery. The EUR/USD currency pair also benefitted from the greenback’s overall weakness as the global reserve currency lost its safe-haven appeal due to the risk-on market mood.
The EUR/USD currency pair surged from a low of 1.2138 during the Asian market to a high of 1.2176 in the mid-European session and was trading near these highs at the time of writing.
The currency pair’s initial rally was boosted by investor expectations of a big US stimulus package that could be agreed on by both parties. The release of the upbeat German factory orders report for October pushed the pair higher. According to the Federal Statistical Office, Germany’s retail sales grew 2.9% in October beating analysts expectations of 1.5% growth. The release of the upbeat Italian retail sales report for October also contributed to the pair’s rally. According to Istat, Italy’s expanded 0.6% in October as compared to the previous month’s 0.7% contraction, which boosted the euro.
The dollar’s overall weakness as tracked by the US Dollar Index, which hit a low of 90.54 today also boosted the pair. However, experts think that this could change given the rising US Treasury yields, which could see investors flock to US government bonds boosting the dollar.
The currency pair’s future performance is likely to be affected by the release of the US non-farm payrolls later today.
The EUR/USD currency pair was trading at 1.2172 as at 11:14 GMT having rallied from a low of 1.2138. The EUR/JPY currency pair was trading at 126.55 having risen from a low of 126.04.
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