Euro Rallies Against Dollar, Later Falls on Dovish Sentiment

The  euro today extended its losing trend against the  much stronger US dollar driven by  the  release of  mostly negative euro area PMI prints by  Markit Economics. The  EUR/USD currency pair today fell driven by  the  massive demand for  the  greenback amid fears that the rising coronavirus cases would derail the global economy.
The  EUR/USD currency pair today hit a  low of  1.1672 in  the  early Frankfurt session before rallying to  a  high of  1.1718, then falling back to  its daily lows in  the  early American session.  
The  pair’s initial rally was field by  positive investor sentiment coupled with comments from the  ECB that it was watching the  euro’s exchange rate. The  release of  the  German GfK consumer confidence survey for  August could not stop the  pair’s rally. The  release of  the  upbeat Markit Germany manufacturing PMI for  September, which came in  at  56.6 versus the  expected 52.5 boosted the  pair. However, the  German services PMI missed consensus estimates. The  Markit eurozone Services PMI also missed expectations, while the  manufacturing PMI print beat analysts estimates. A  similar trend was repeated in French manufacturing and  services PMIs.
The  dollar’s rally was a  significant driver behind the  pair’s decline as  tracked by  the  US Dollar Index, which hit a  high of– today. The  pair fell below its initial lows as  the  Fed chairman Jerome Powell testified before the  House Select Committee.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s German IFO survey data.
The  EUR/USD currency pair was trading at  1.1678 as  at  15:02 GMT, having fallen from a  high of  1.1718. The  EUR/JPY currency pair was trading at  122.93, having risen from a  low of  122.57.
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