The euro today rallied slightly against the US dollar despite the lack of any major data releases from the eurozone and the simmering Italian budget drama. The EUR/USD currency pair’s rally is most likely due to a technical pullback given yesterday’s massive decline and the risk-off market sentient that still exists.
The EUR/USD currency pair today rallied from a low of 1.1439 to a high of 1.1486 and was trading near its daily highs at the time of writing.
The currency pair opened today’s session on a downtrend before rallying higher in the early European session following two positive releases from Germany. According to the Federal Statistical Office, Germany’s producer prices grew by 0.5% in September versus the expected 0.3% expansion. The annual PPI figure also came in at 3.2% beating expectations by 0.2%, which triggered the pair’s initial rally. The pair was also boosted by the positive reaction of the Italian government towards the European Commission‘s expected rejection of the country’s budget. Italy’s deputy Prime Minister Luigi Di Maio was optimistic that the two sides would reach an agreement by next week Monday.
The risk-off market sentiment also capped the currency pair’s gains given that the UK government rejected the EU’s backstop proposal even as Brexit negotiations seem to be making little headway.
The currency pair’s short-term performance is likely to be influenced by the release of the eurozone consumer confidence data later today as well as geopolitical developments.
The EUR/USD currency pair was trading at 1.1474 as at 12:37 GMT having risen from a low of 1.1439. The EUR/JPY currency pair was trading at 128.72 having dropped from a high of 129.31.
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