The EUR/USD currency pair today rallied higher during the European session after German Chancellor, Angela Merkel, blamed the euro’s weakness on the European Central Bank. The lack of economic releases from both the US and the European dockets made the currency pair especially sensitive to Merkel’s comments.
The currency pair rallied to a daily high of 1.1262, a level it hit last on November 9. The pair gained over 90 points at the height of its mid-European morning rally and was on an upward trend at the time of writing.
The empty US and European economic dockets made the currency pair especially susceptibel to political comments. Angela Merkel blamed the euro’s weakness on the dovish policies implemented by Mario Draghi and his team at the European Central Bank. She was commenting on Germany’s trade surplus, which triggered a buying frenzy on the euro as investors expect the ECB to adopt a more hawkish outlook.
The EUR/USD pair has been on a rally for the past seven days having closed higher on six of these days. This can largely be attributed to the weaker US dollar as tracked by the US Dollar Index, which was trading below its opening price of 97.13 for most of today.
The currency pair’s future performance is likely to be affected by the release of Eurozone and German PMI data, both scheduled for tomorrow.
The EUR/USD was trading at 1.1239 as at 18:11 GMT having risen from a daily low of 1.1157 prior to Merkel’s comments. The EUR/JPY was trading at 124.92 having retraced its gains from a high of 125.28.
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