The euro today rallied higher against the US dollar driven by the risk-on market sentiment, which saw the dollar lose ground against riskier assets such as the single currency. The EUR/USD currency pair today rallied ignoring weak data from the euro area, and upbeat inflation data from the US as investors bid up the currency pair as European equities rallied.
The EUR/USD currency pair today fell to a low of 1.1711 in the Asian session before rallying to a high of 1.1816 in the American market but was below the crucial 1.18 resistance level at the time of writing.
The currency pair rallied higher driven by the resurgence investor risk appetite, which saw risk assets such as the EURO STOXX 600 and the Japanese Nikkei 225 index close higher. The currency pair ignored the release of the disappointing Italian consumer price index report for July. According to Istat, Italy’s headline inflation contracted 0.2% versus the expected 0.1% print, translating into an annualised -0.5% versus consensus estimates of -0.4%. The weak eurozone industrial production data for July also had a muted impact on the pair. According to Eurostat, the eurozone’s industrial production rose 9.1% missing consensus estimates of 10%.
The currency pair ignored the upbeat US consumer price index report for July released by the Bureau of Labor Statistics. The greenback’s weakness as tracked by the US Dollar Index, which hit a low of 93.27, also fueled the pair’s rally.
The currency pair’s future performance is likely to be affected by tomorrow’s German and US releases.
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