Euro Rallies Against Dollar on Elevated Sentiment, Falls Then Rises

The  euro today rallied against the  US dollar twice followed by  quick retracements despite the  upbeat investor risk appetite that boosted risk assets. The  EUR/USD currency pair today rallied then gave up all its gains before rallying again as  the  bulls and  bears fought for  control amid mixed euro area macro prints.
The  EUR/USD currency pair today rallied from a  low of  1.1717 in  the  Australian market to  a  high of  1.1770 in  the  mid-European session. Still, it had two significant retracements recovering each time.
The  heightened investor risk appetite drove the  currency pair’s rally. The  release of  the  disappointing Markit/BME Germany Manufacturing PMI, which came in  at  56.4 versus the  consensus estimate of  56.6 drove the  pair lower. The  upbeat Markit France Manufacturing PMI, which came in  at  51.2 versus the  expected 50.9 had no impact on  the  pair. The  in-line Markit eurozone Manufacturing PMI, which was recorded at  53.7, also had a  muted effect on  the  euro. The  pair recovered and  rallied higher after the  release of  the  upbeat eurozone producer price index report for  August by  Eurostat. The  in-line eurozone unemployment report also boosted the  single currency.
The  release of  the  upbeat US Personal consumption expenditure report coupled with the  positive US initial jobless claims report drove the  euro’s second decline, which was quickly followed by  a  rally.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s eurozone inflation data and  US dollar dynamics.
The  EUR/USD currency pair was trading at  1.1746 as  at  18:49 GMT having risen from a  low of  1.1717. The  EUR/JPY currency pair was trading at  123.98 having rallied from a  low of  123.61.
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