Euro Gains Despite Discouraging News

The euro rallied against its major peers on Monday and retained its gains at the start of Tuesday’s trading even though news from the European Union was not especially encouraging.

According the flash estimate, the consumer confidence index improved this month in the eurozone and the whole EU but remained in the negative territory. The German Producer Price Index dropped 2.5 percent in November from a year ago. On top of that all, the Spanish elections resulted in a hung parliament.

Yet with all the negative fundamentals, the euro moved higher stubbornly, refusing to give ground to its rivals. The outcome is surprising, especially after the Federal Reserve hiked interest rates, and makes it hard to predict how the currency will behave in the future.

EUR/USD was up from 1.0851 to 1.0916 yesterday and remained close to that level as of 3:58 GMT today. EUR/GBP traded at about 0.7334 after climbing from 0.7284 to 0.7329 during the Monday’s trading session. EUR/JPY advanced from 131.63 to 132.22 on Monday and went higher to 132.40 during the Tuesday’s session.

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