Euro Edges Higher on German GDP, Later Falls on Soaring US Yields

The euro initially edged higher against the dollar, boosted by investor sentiment and positive data from Germany, before reversing and heading lower later in the session. The EUR/USD fell as US Treasury yields soared, lifting the dollar despite the Fed chair Jerome Powell’s dovish stance on the central bank’s monetary policies.
The EUR/USD currency pair rose to a high of 1.2174 in the early Frankfurt session before dropping to a low of 1.2109 in the American market and was trading near these lows at the time of writing.
The currency pair initially fell before reversing course and heading higher ahead of Germany’s Q4 GDP report, which beat expectations. According to the Federal Statistical Office, Germany’s GDP grew 0.3% in Q4, beating analysts’ estimates of a 0.1% increase. The annualised prints were also better than expected. The pair’s rally was also driven by Jerome Powell’s dovish testimony before the Senate committee yesterday as he confirmed that the Federal Reserve would not tighten its loose monetary policies any time soon. The release of France’s manufacturing business climate report for February by Insee had a muted impact on the euro.
As tracked by the US Dollar Index, the dollar’s rally, which hit a high of 90.43, fueled the fibre’s decline. The upbeat US new home sales report for January released by the Census Bureau contributed to the pair’s decline, as did Jerome Powell’s testimony today.
The currency pair’s future performance is likely to be affected by tomorrow’s German and Eurozone consumer confidence reports.
The EUR/USD currency pair was trading at 1.2143 at 19:01 GMT after dropping from a high of 1.2174. The EUR/JPY currency pair was trading at 128.69, having rallied from a low of 127.93.
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Original from: www.earnforex.com