Euro Rallies on Draghi Speech, Later Declines on Eurozone CPI Data

The  euro inched higher against the  US dollar in  the  Asian session and jumped higher in  the  early European session after Mario Draghi’s mostly hawkish speech in  Frankfurt. The  euro then headed lower against the  greenback following the  release of  the  latest eurozone CPI data, which was in-line with expectations.
The  EUR/USD currency pair today rallied to  a  high of  1.1369 before dropping to  a  low of  1.1320 after the inflation data.
The  currency pair initially headed higher driven by  the  risk-on market sentiment that has dominated the  market for  most of  the  week due to  the  possibility of  a  US-China trade deal. The  pair’s rally gathered momentum after the  European Central Bank President, Mario Draghi delivered a  hawkish speech in  Germany where he stated that the  economic recovery in  the  euro area was resilient. He also reiterated the  fact that the  ECB would terminate its asset purchase programs in  December. However, he also warned that the  eurozone economy faces various uncertainty that could hinder the  region’s economic growth, such as, a  disorderly Brexit.
The  pair headed lower after the  release of  the  eurozone CPI data for  October by  Eurostat with the  monthly print coming in  at  0.2%, which translated into an  annualized 2.2%; both prints met expectations as  did the  core CPI print, which was recorded at  1.1%.
The  currency pair’s short-term performance is likely to  be influenced by  the  release of  the  US industrial production and  manufacturing production data later today.
The  EUR/USD currency pair was trading at  1.1330 as  at  11:53 GMT having dropped from a  high of  1.1369. The  EUR/JPY currency pair was trading at  128.38 having fallen from a  high of  128.78.

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