Euro Rallies on Bullish Sentiment, Mixed Eurozone Inflation Data

The  euro today rallied higher against the  US dollar driven by  positive investor sentiment even as  the  greenback registered losses across the  board. The  EUR/USD currency pair rallied higher ignoring the  weak eurozone inflation data released earlier today as  investors bid up riskier assets.
The  EUR/USD currency pair today rallied from an  opening low of  1.0926 to  a  high of  1.0998 in  the  early American session and  was trading near these highs at  the  time of  writing.
The  currency pair’s initial rally was largely driven by  investor appetite for  riskier assets amid hope that the  worst effects of  the  COVID-19 pandemic globally are over. The  release of  the  euro area’s current account data by  the  European Central Bank early in  the  European session had a  muted impact on  the  pair. However, the  pair rallied higher following the  release of  the  eurozone consumer price index data by  Eurostat. The  headline inflation print was 0.3%, while the  core print was 0.9%; both prints met expectations but the  annualised prints missed consensus estimates. Investors were willing to  ignore the  uncertainty surrounding Germany’s and  France’s €500 billion funding proposal, which is facing opposition from other countries.  
The  greenback’s overall weakness as  tracked by  the  US Dollar Index, which hit a  low of  99.00 today, also contributed to  the  pair’s rally. The  pair had a  muted reaction to  the  release of  the  FOMC minutes as  Jerome Powell‘s testimony had covered most of  the  report.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s multiple eurozone and  US releases.
The  EUR/USD currency pair was trading at  1.0982 as  at  19:50 GMT having rallied from a  low of  1.0926. The  EUR/JPY currency pair was trading at  118.09 having risen from a  low of  117.74.
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