The euro today rallied higher against the US dollar after it was confirmed that the European Central Bank was considering ending its massive quantitative easing program. The news confirmed a report that was circulating on Tuesday about the possibility of such action by the ECB.
The EUR/USD currency pair today rallied by over 65 points from a low of 1.1712 to a high of 1.1780 after the ECB news broke.
The currency pair’s rally was triggered by the ECB Chief Economist Peter Praet‘s admission that the institution was set to discuss ways of ending its QE program. He also confirmed that the ECB is likely to maintain rates at their current levels for the foreseeable future. The release of the Markit Germany Construction PMI for May also boosted the euro as it came in at 53.9, which was higher than the previous 50.9. The Markit Germany Retail PMI also surprised to the upside by coming in at 55.5 versus the previous 51.0. The Markit Eurozone Retail PMI also recorded positive growth by coming in at 51.7 as compared to the previous 48.6.
The currency pair’s rally was further boosted by the weaker greenback as tracked by the US Dollar Index, which hit a low of 93.58 today. The greenback was weighed down by concerns regarding the possibility of a full-scale global trade war pitting the world’s major economies against the USA.
The currency pair’s short-term performance is likely to be affected by the release of the US trade balance data scheduled for later today.
The EUR/USD currency pair was trading at 1.1771 as at 11:48 GMT having rallied from a low of 1.1712. The EUR/JPY currency pair was trading at 129.72 having risen from a low of 128.71.
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