Euro Rallies Against US Dollar Amid Falling US Bond Yields, Later Declines

The  euro today rallied higher against the  weaker US dollar boosted by  bearish investor sentiment towards the  world’s reserve currency. The  EUR/USD currency pair rallied higher as  markets reacted to  falling US Treasury yields amid doubts about the  trade ceasefire between the  US and  China.
The  EUR/USD currency pair today rallied from an  opening low of  1.1348 to  a  high of  1.1419 in  the  mid-European session before retracing some of  its gains.
The  currency pair’s initial rally was largely triggered by  the  selling pressure on  the  greenback amid, which was plagued by  doubts regarding the  recent trade truce. The  massive drop in  US treasury yields, which resulted in  the  2-year and  10-year yield spread reaching an  11-year low, also boosted the  pair’s rally. Despite the  fact that yesterday’s US ISM manufacturing PMI recorded a  slight improvement, the  ISM Price index fell, which indicated a  lower inflation rate in  October. The  lower inflation rate could have been responsible for the lower yields.
The  currency pair was also boosted by  the  positive developments in  the  Italian budget standoff where the  Italian Prime Minister Giuseppe Conte is expected to  present a  revised budget to  the  European Commission. The  pair was further boosted by  the  European Court of  Justice ruling that the  UK could revoke article 50 unilaterally allowing the  country to  reverse the  Brexit process.
The  currency pair’s future performance is likely to  be influenced by  tomorrow’s eurozone retail sales data and  the  US ISM non-manufacturing/services PMI.
The  EUR/USD currency pair was trading at  1.1371 as  at  15:33 GMT having dropped from a  high of  1.1419. The  EUR/JPY currency pair was trading at  128.39 having fallen from a  high of  129.01.

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