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Euro Rallies on Upbeat Fundamental Releases From the Euro Area

May 29, 2020 at 10:36 by Simon Mugo

A closeup on the euro note

The euro today rallied higher against the US dollar extending yesterday’s gains following the release of upbeat core inflation data from the eurozone. The EUR/USD currency pair capitalised on positive macro reports from across the euro area combined with the greenback’s overall weakness to inch higher.

The EUR/USD currency pair today rallied from an opening low of 1.1069 to a high of 1.1139 in the mid-European session and was headed higher at the time of writing.

The currency pair’s initial rally was driven by positive investor sentiment amid positive data and headlines from the euro area. The release of the upbeat retail sales data from Germany drove the pair higher. According to the Federal Statistical Office, German retail sales fell 5.3% in April versus the expected 12% decline. However, Germany’s import price index was lower than expected in April. The positive French quarterly GDP report released by Insee also boosted the pair as the print came in at -5.3% versus consensus estimates of -5.8%. The positive eurozone M3 money supply report released by the European Central Bank boosted the single currency.

The upbeat preliminary eurozone CPI data released by Eurostat helped the pair maintain its bullish momentum. The headline CPI print came in at 0.1% versus the expected 0.2%, but the annualised figure came in at 0.9%, beating analysts estimates of 0.8%.

The greenback’s weakness as tracked by the US Dollar Index, which hit a low of 98.04 today, also contributed to the pair’s rally.

The currency pair’s future performance is likely to be affected by President Donald Trump’s speech on China later today.

The EUR/USD currency pair was trading at 1.1137 as at 10:35 GMT, having rallied from a low of 1.1069. The EUR/JPY currency pair was trading at 119.35, having risen from a low of 118.86.

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