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EUR/USD Retreats from Weekly Highs on Catalan Uncertainties

October 10, 2017 at 14:28 by Simon Mugo

Euro sign monumentThe EUR/USD currency pair today retreated from daily highs hit in the early European session due to uncertainties relating to the Catalan independence movement. The currency pair had rallied to weekly highs in the early European session following a broad-based selling of the US dollar and positive German trade balance data.

The EUR/USD currency pair rallied to weekly highs above the critical 1.1800 levels, before retracing some of its gains as investors waited for news regarding Catalan independence.

The release of German trade balance data by the Federal Statistical Office boosted the euro leading to a rally that lasted for a few hours. Germany recorded a trade balance of €20.0 billion, which was higher than the market expectation of a $19.5 billion trade surplus. Other releases from the Eurozone included Germany’s total exports for August, which recorded a 3.1% growth rate as opposed to the market consensus of 1.1% growth. The country’s total imports also exceeded expectations by coming in at 1.2% versus the expected 0.5% increase.

The currency pair’s rally was subdued by the uncertainty surrounding the Catalan independence movement even as market awaited a speech from Catalan President, Carles Puigdemont. The weaker US dollar as tracked by the US Dollar Index, which hit new lows around 93.20 after declining from last week’s highs around 94.30, also contributed to the pair’s rally.

The currency pair’s future performance is likely to be affected by political events in Spain as well as the release of the FOMC September meeting minutes tomorrow.

The EUR/USD currency pair was trading at 1.1804 as at 14:25 GMT having rallied higher from a daily low of 1.1739. The EUR/JPY currency pair was trading at 132.28 having dropped from a high of 132.75.

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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