Euro Rallies on Upbeat Sentiment, Later Falls as Dollar Recovers

The  euro today rallied higher against the  US dollar buoyed by  the  positive investor sentiment and  mostly in-line macro reports from across the  euro area. The  EUR/USD currency pair edged higher for  the  fifth consecutive session as  the  dollar remained on  the  back foot due to  the  looming November US Presidential elections.
The  EUR/USD currency pair today rallied from an  initial low of  1.1858 in  the  Australian session to  a  high of  1.1900 before retracing some of  its gains and  heading lower.
The  pair’s initial rally was boosted by  positive market sentiment after China reported improved industrial output and  retail sales figures for  August showing signs of  a  robust economic recovery. The  release of  the  in-line French consumer price index report for  August by  Insee had a  muted impact on  the  pair. The  in-line Italian inflation report for  August published by  Istat also had a  minimal effect on  the  currency pair, which kept falling. The  upbeat German ZEW survey data for  September barely moved the  pair, despite both the  current assessments and  current situation prints beating analysts estimates.
The  upbeat ZEW eurozone economic sentiment survey also contributed to  the  pair’s second   rally. The  release of  the  mixed US export and  import price indexes by  the  US export and  import price indexes caused the  pair to  give up most of  its gains.
The  currency pair’s future performance is likely to  be affected by  market sentiment and  tomorrow’s FOMC rate decision,
The  EUR/USD currency pair was trading at  1.1878 as  at  13:06 GMT, having fallen from a  high of  1.1900. The  EUR/JPY currency pair was trading at  125.15, having dropped from a  high of  125.77.
If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.