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Euro Rallies As Investors Turn Bullish on US Data, Georgia Election

January 5, 2021 at 19:27 by Simon Mugo
A fan of 500-euro bills

The euro today rallied higher against the dollar during the American session boosted by positive US releases, a weak dollar and bullish investor sentiment. The EUR/USD currency pair had traded in a tight range earlier in the day despite positive euro area releases including the upbeat German retail data.

Today, the EUR/USD currency pair rallied from a low of 1.2247 in the Australian market to a high of 1.2305 during the American session and was near these highs at the time of writing.

The currency pair initially alternated between gains and losses despite the release of upbeat German retail sales data for November in the early Frankfurt session. According to the Federal Statistical Office, Germany’s retail sales rose 1.9% in November beating analysts expectations of a 2% contraction. The release of Germany’s upbeat unemployment rate report for November also had a muted impact on the single currency. The release of the eurozone M3 money supply report by the European Central Bank also had a minimal impact on the euro.

The currency pair’s gains were capped by the US Senate election runoff in Georgia that could give the Democratic Party control upending the Republican majority.

The pair rallied higher following the US ISM Manufacturing PMI release, which came in at 60.7 beating analysts consensus estimates set at 56.6. The start of the Georgia election and the rally in US equity markets also boosted the pair.

The currency pair’s future performance is likely to be affected by the Georgia Senate election outcome.

The EUR/USD currency pair was trading at 1.2299 at 19:26 GMT having rallied from a low of 1.2247. The EUR/JPY currency pair was trading at 126.25 having fallen from a high of 126.55.

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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