Euro Declines on Flat German Inflation Amid US Dollar Rebound

The  euro today dropped from 2-week highs against the  US dollar as  the  greenback rallied higher from the  early European session to  recoup most of  yesterday’s losses. The  EUR/USD currency pair rallied slightly after the  release of  positive German inflation data, but could not sustain its rally due to  the  resurgent greenback.
The  EUR/USD currency pair today dropped from an  Asian session high of  1.1610 to  a  low of  1.1533 in  the  early American session, but had recovered slightly at  the  time of  writing.
The  currency pair rallied briefly after Germany’s Federal Statistical Office released the  country’s latest inflation data. The  final German CPI data for  September was in  line with previous estimates by  coming in  at  a  monthly 0.4%, which translated into an  annualized 2.3%. However, the  rally did not last as  the  greenback soon overtook the  single currency, which led to  a  sustained downward trend up to  the  early American session. The  release of  the  German industrial production data for  September, which beat expectations by  recording a  1.0% expansion versus the  expected 0.4% growth had a  muted impact on  the  pair.
Today’s recovery in  the  greenback was the  main driver behind the  pair’s decline as  the  dollar was boosted by  hawkish comments from the  Chicago Fed’s Charles Evans. The  release of  weak US import data had a  muted impact on  the  pair, but the  disappointing University of  Michigan consumer sentiment survey triggered a  brief rally by  the  pair.
Geopolitical events are likely to  influence the  pair’s performance over the  weekend.
The  EUR/USD currency pair was trading at  1.1558 as  at  16:35 GMT having dropped from a  high of  1.1610. The  EUR/JPY currency pair was trading at  129.41 having declined from a  high of  130.49.

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