The euro today rallied higher against the US dollar as investors embraced the risk-on mood in the market after it emerged that North Korea was considering possible denuclearization. The news emerged from talks between North Korea and its Southern counterpart, and its impact was significant enough to outweigh the effect of the Italian general election on the single currency.
The EUR/USD currency pair gained over 80 points to rally from a low of 1.2327 to a high of 1.2414 at the time of writing.
The North Korea news outweighed market concerns about trade wars between the USA and the European Union, which had caused the pair to trade sideways earlier today. The single currency had also been weighed down by investors’ concerns regarding the weekend election in Italy, which resulted in a hung parliament. The release of the Markit Germany Construction PMI, the Markit Italy Retail PMI, the Markit France Retail PMI and the Markit Germany Retail PMI, all had a slight positive impact on the currency pair.
The renewed selling pressure on the US dollar on fears of a trade war with the EU also contributed to the pair’s rally. The release of US January factory orders and durable goods orders by the Census Bureau had a slight negative impact on the currency pair, but could not reverse most of its gains.
The currency pair’s future performance is likely to be affected by tomorrow’s Eurozone Q4 GDP data, and the US ADP employment change report.
The EUR/USD currency pair was trading at 1.2398 as at 15:54 GMT having rallied from a low of 1.2327. The EUR/JPY currency pair was trading at 131.42 having risen from a low of 130.56.
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