Euro Hits 3-Month High as Dollar Crumbles on Coronavirus Fears

The  euro today to  new highs as  the  dollar crumbled in  the  face of  mounting coronavirus fears amid and  falling US Treasury yields dampened demand for  the  greenback. The  EUR/USD currency pair today rallied above the  crucial 1.10 level as  investors flocked to  the  single currency boosted by  positive euro area fundamental releases.
The  EUR/USD currency pair today rallied from an  opening low of  1.0885 to  a  high of  1.1006 in  a  120 pip move but was off these highs at  the  time of  writing.
The  currency pair traded with a  bullish bias from the  start of  today’s session as  investors grappled with rising fears of  a  global coronavirus pandemic as  US health experts warned the  country was at  risk. The  release of  in-line Spanish preliminary consumer price index data for  February by  the  National Institute of  Statistics also boosted the  pair. The  upbeat eurozone business climate and  economic sentiment indicators released by  the  European Commission also raised the  pair. However, many analysts believe that the  euro’s rally could be a  result of  the  unwinding of  a  carry trade by  investors with deep pockets who were net short the  euro.
The  release of  positive preliminary US Q4 GDP data by  the  Bureau of  Economic Analysis had a  muted impact on  the  currency pair. The  US Dollar Index kept falling as  investors sold the  low-yielding currency. Other US releases also could not stop the  currency pair’s rally.
The  pair’s future performance could be affected by  technical and  geopolitical factors, and  tomorrow’s multiple US and  European releases.
The  EUR/USD currency pair was trading at  1.0981 as  at  18:13 GMT having risen from a  low of  1.0885. The  EUR/JPY currency pair was trading at  120.98 having rallied from a  low of  119.95.

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