EUR/USD Trades Sideways on North Korean and Eurozone News

The EUR/USD currency pair today rallied higher after North Korea declared that it will continue its self defense measures in retaliation to the USA. The pair recovered from a brief decline that had been triggered by the release of disappointing Markit Eurozone services PMI early in the European session.

The currency pair was trading in a 40 point range after opening today’s session trending downwards, but it took an upward trend after the North Korean news.

The currency pair opened today’s session under intense selling pressure as the single currency reeled from disappointing Eurozone producer price index data released by Eurostat yesterday. The pair continued to decline until the release of the Markit Eurozone services PMI, which did not meet expectations, as it came in at 54.7 versus the expected 54.9. The PMI data had the opposite effect on the currency pair as it rallied slightly higher after the release. The release of the positive Eurozone retail sales data, which beat expectations, was also discounted by the markets.

However, it was the North Korean UN Ambassador’s comments on the country’s recent missile launches that drove the EUR/USD much higher. The comments triggered selling pressure on the US dollar as tracked by the US Dollar Index, which hit a low of 92.47.

The continuing tensions between the USA and North Korea are likely to affect the US dollar negatively, while boosting the euro.

The EUR/USD currency pair was trading at 1.1891 as at 13:28 GMT having rallied from a low of 1.1869 earlier today. The EUR/JPY pair was trading at 129.85 having dropped from a high of 130.59.

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