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Euro Rallies Against Weak Dollar Driven by Positive Sentiment

June 9, 2020 at 18:23 by Simon Mugo

Euro coins and EUR banknotes closeupThe euro today spiked higher against the US dollar in the early American session driven by upbeat investor sentiment even as European equity markets closed lower today. The EUR/USD currency pair today rallied higher boosted by mixed data from the eurozone and the weaker greenback, which saw other major currencies post gains at its expense.

The EUR/USD currency pair today rallied from a low of 1.1241 in the European session to a high of 1.1363 in the American session but was slightly off these highs at the time of writing.

The currency pair today headed lower during the Asian session but reversed course and headed higher into the European open. The release of disappointing German trade balance data before the open drove the pair lower. According to Germany’s Federal Statistical Office, the country’s trade balance narrowed to 3.2 billion in April as compared to the 12.8 billion recorded in March. The country’s exports also fell by 28% during the same month. France’s trade balance report for April released by Minefa also disappointed investors adding to the pair’s woes.

The pair’s recovery was triggered by the release of the upbeat Eurozone Q1 GDP data by Eurostat, which beat consensus estimates. The report indicated that the eurozone GDP contracted 3.6% versus the expected 3.8%, which appealed to investors. The pair’s rally was further fueled by the weak greenback as tracked by the US Dollar Index, which hit a low of 96.22 today.

The currency pair’s future performance is likely to be affected by tomorrow’s FOMC interest rate decision.

The EUR/USD currency pair was trading at 1.1344 as at 18:22 GMT having rallied from a low of 1.1241. The EUR/JPY currency pair was trading at 122.14 having risen from a low of 121.33.

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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