Euro Rallies on Trade Deal Optimism and Hawkish ECB Strategic Review

The  euro today rallied higher against the  US dollar driven by  upbeat investor risk sentiment in  anticipation of  the  US-China phase one trade deal signing later today. The  EUR/USD currency pair’s rally was also spurred by  investor expectations that the  European Central Bank could turn hawkish in  the  medium-term after a  strategic review.
The  EUR/USD currency pair today rallied from a  low of  1.1119 in  the  early European session to  a  high of  1.1154 later in  the  session and  was heading higher at  the  time of  writing.
The  currency pair rallied higher at  the  start of  today’s session before falling to  its daily lows and  then rose for  a  second time. The  release of  the  annualised German GDP growth data by  the  Federal Statistical Office in  the  early European session had a  muted impact on  the  single currency. The  pair rallied higher despite the  release of  the  disappointing eurozone trade balance report for  November by  Eurostat. The  weak eurozone industrial production data for  November, also had a  muted impact on  the  currency pair as  investors kept pushing the  pair higher.
Hawkish comments by  Robert Holzmann a member of the ECB’s governing council also boosted the single currency as the  ECB prepares to  start its strategic review next week. The  currency pair also benefited from the  weak greenback as  tracked by  the  US Dollar Index, which hit a  low of  97.23.
The  currency pair’s future performance is likely to  be affected by  geopolitical events and  the  release of  the  US PPI report later today.
The EUR/USD currency pair was trading at 1.1150 as at 12:20 GMT, having rallied from a low of 1.1119. The EUR/JPY currency pair was trading at 122.50, having risen from a low of 122.20.

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