Euro Rallies on Italian Budget Hopes, Declines on Weak German Data

The  euro today rallied higher against the  US dollar from the  Asian session into the  early European session on  hopes that the  Italian government would amend its budget plans. The  EUR/USD currency pair later headed lower after the  German IFO business survey data missed expectations and  Mario Draghi‘s speech had no new insights.
The  EUR/USD currency pair today rallied from a  low of  1.1325 in  the  Asian session to  a  high of  1.1384 in  the  European session before heading lower.
The  currency pair begun rallying higher shortly after the  start of  today’s session as  investors priced-in the  likelihood of  Italy’s government making budget concessions. Comments by  Italy’s Deputy Prime Minister Matteo Salvini suggested that the  country was willing to  reduce its budget deficit to  end the  standoff. This was the  result of  a  weekend meeting between Italian PM Giuseppe Conte and  European Commission President Jean-Claude Juncker. The  release of  the  German IFO business climate index in  the  early European session triggered the  pair’s decline as  the  prints missed expectations. The  IFO business climate print came in  at  102.0 missing expectations by  0.3, while the  IFO expectations print was recorded at  98.7 missing consensus estimates by  0.6.
Speeches from several members of  the  European Central Bank‘s Governing Council including the  ECB President Mario Draghi had a  muted impact on  the  currency pair as it continued falling.
The  currency pair’s future performance is likely to  be influenced by  Italian budget developments and  tomorrow’s German retail sales data.
The  EUR/USD currency pair was trading at  1.1335 having retraced all of  today’s   gains by  dropping from a  high of  1.1384. The  EUR/JPY currency pair was trading at  128.74 having risen from a  low of  127.99.

If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.