The euro today rallied higher against the US dollar driven by positive investor sentiment even as the greenback registered losses across the board. The EUR/USD currency pair rallied higher ignoring the weak eurozone inflation data released earlier today as investors bid up riskier assets.
The EUR/USD currency pair today rallied from an opening low of 1.0926 to a high of 1.0998 in the early American session and was trading near these highs at the time of writing.
The currency pair’s initial rally was largely driven by investor appetite for riskier assets amid hope that the worst effects of the COVID-19 pandemic globally are over. The release of the euro area’s current account data by the European Central Bank early in the European session had a muted impact on the pair. However, the pair rallied higher following the release of the eurozone consumer price index data by Eurostat. The headline inflation print was 0.3%, while the core print was 0.9%; both prints met expectations but the annualised prints missed consensus estimates. Investors were willing to ignore the uncertainty surrounding Germany’s and France’s â¬500 billion funding proposal, which is facing opposition from other countries.
The greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 99.00 today, also contributed to the pair’s rally. The pair had a muted reaction to the release of the FOMC minutes as Jerome Powell‘s testimony had covered most of the report.
The currency pair’s future performance is likely to be affected by tomorrow’s multiple eurozone and US releases.
The EUR/USD currency pair was trading at 1.0982 as at 19:50 GMT having rallied from a low of 1.0926. The EUR/JPY currency pair was trading at 118.09 having risen from a low of 117.74.
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Euro Rallies on Bullish Sentiment, Mixed Eurozone Inflation Data
