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Euro Rallies Higher Against US Dollar on Positive Eurozone CPI Data

May 17, 2017 at 19:21 by Simon Mugo

One euro coinThe EUR/USD curreny pair rallied higher today after the release of the Eurozone core CPI data by Eurostat, which met market expectations. The currency pair hit a new six-month high during the American session as the US dollar weakened against the euro.

The currency pair rallied to a new high of 1.1155 and was on an upward trend at the time of writing. The pair is on track to close the day’s session on a high, which is an extension of a rally that started on Friday last week.

The month-on-month Eurozone Consumer Price Index came in at 0.4% for April, which met the market consensus of the same figure. The annualized CPI figure also met market expectations as it was recorded at 1.9% and the core inflation figures was recorded at 1.2%. The inflation figures are about to meet the European Central Bank‘s target of 2.0%, which was a major trigger for the euro’s upward momentum.

Political controversies surrounding Donald Trump in the US such as Russia-gate have had a major negative impact on the US dollar’s performance this week, which has pushed the euro higher. The softer economic data from the US such as yesterday’s weak housing starts data and last week’s poor inflation and GDP data have also contributed to the greenback’s weakness.

The EUR/USD currency pair’s future performance is likely to be affected by the release of the US jobless claims data scheduled for tomorrow. 

The EUR/USD pair was trading at 1.1146 as at 19:16 GMT having risen from a low of 1.1079 earlier today. The EUR/GBP was trading at 0.8604 having risen from a low of 0.8558 prior to the release.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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