Euro Rallies on Huge Drop in Global Equity Markets, Later Declines

The  euro today rallied higher against the  US dollar from the  early European session largely due to  the  massive pullback in  global equity markets, which favored the  single currency. The  EUR/USD currency pair’s rally was further boosted by  President Donald Trump‘s criticism of  the  Fed’s monetary policy position, which also contributed to  the  greenback’s weakness.
The  EUR/USD currency pair today rallied to  a  high of  1.1599 almost breaching the  crucial 1.1600 level before retracing most of  its gains.
The  massive rout in  global equity markets was the  main trigger that rescued the  currency pair from its Asian session slump by  weakening the  greenback. The  single currency also benefited from the  fact that most of  the  budget and  political headlines coming out of  Italy were already priced into the  pair. Yesterday’s sell-off in  US equity markets and  the rising US 10-year Treasury yields also boosted the  currency pair. The  release of  the  European Central Bank minutes of  the  latest monetary policy meeting had a  muted impact on  the  pair because it simply confirmed the  bank’s timeline of  raising rates in  September/October 2019.
The  currency pair rallied higher after the  release of  the  US consumer price index data by  the  Bureau of  Labor Statistics as  the  print missed expectations. The  pair’s rally ran out of  steam shortly thereafter and  it started dropping as  the  greenback recovered.
The  currency pair’s future performance is likely to  be affected by  geopolitical events as  well as  tomorrow’s German CPI data.
The  EUR/USD currency pair was trading at  1.1568 as  at  14:51 GMT having rallied from a  low of  1.1530. The  EUR/JPY currency pair was trading at  129.89 having risen from a  low of  129.24.

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