Euro Recovers as US-China Trade Talks Are Set to Resume

The  euro today recovered from the  14-month lows hit yesterday following the  news that trade negotiations between China and  the  USA are set to  resume later this month. The  EUR/USD currency pair was also boosted by  the  release of  the  latest Eurozone trade balance data in  the  early European session, which beat expectations.
The  EUR/USD currency pair today rallied from a  low of  1.1335 in  the  Asian session to  a  high of  1.1399 before retracing some of  its gains.
The  currency pair’s rally was largely triggered by  news that the  Chinese vice minister of  commerce will be heading to  the  US in  late August to  resume trade talks. The  news ignited the  risk-on sentiment in  the  markets, which boosted riskier currencies such as  the  euro. The  currency pair had a  negative reaction to  the  release of  the  German wholesale price index by  the  Federal Statistical Office earlier today. The  pair also declined after the  release of  the  Eurozone trade balance data by  Eurostat despite the  print coming in  at  â‚¬22.5 billion versus the  expected €16.5 billion.
The  news of  the  resumption of  trade talks had a  negative impact on  the  greenback as  tracked by  the  US Dollar Index, which dropped from year-to-date highs near the  97.00 level. Thus, the  US dollar lost ground against most of  its trading peers.
The  currency pair’s future performance is likely to  be affected by  the  release of  US housing starts, jobless claims, and  the  Philadelphia Fed manufacturing index.
The  EUR/USD currency pair was trading at  1.1366 as  at  10:33 GMT having dropped from a  high of  1.1399. The  EUR/JPY currency pair was trading at  126.01 having rallied from a  low of  125.28.

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