EUR/USD Rallies Higher on Mixed Eurozone Data, Later Declines

The EUR/USD currency pair today rallied higher in the early European session following the release of mixed PMI data from across the Eurozone by IHS Markit. The currency pair’s initial rally was further boosted by the weaker US dollar as tracked by the US Dollar Index whose recovery had stalled in the early European session.

The EUR/USD pair today rallied briefly from a low of 1.1682 to a high of 1.1717, but later headed lower as the US dollar recovered.

The currency pair’s initial rally was fueled by the release of the Markit Germany Services PMI for May, which met expectations by coming in at 52.1. The Markit France Services PMI also met expectations as it was recorded at 54.3. The Markit Italy Services PMI also beat expectations by coming in at 53.1 versus the expected 53.0. The euro’s rally was limited by the Markit Eurozone Services PMI, which came in at 53.8 missing expectations by 0.1%. The weak Eurozone retail sales data for April released by Eurostat also contributed to the pair’s decline after its brief rally. The retail sales recorded 0.1% growth in April versus the expected 0.5% growth.

The currency pair’s rally was capped by the positive sentiment around European equities as the Italian political crisis appears to be resolved. New Italian Prime Minister Giuseppe Conte‘s government will face a vote of confidence later today.

The currency pair’s short-term performance is likely to be affected by the release of the US ISM Non-Manufacturing/Services PMI later today.

The EUR/USD currency pair was trading at 1.1665 as at 12:30 GMT having declined from a high of 1.1717. The EUR/JPY currency pair was trading at 127.96 having dropped from a high of 128.70.

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