Euro Rallies Against Dollar on German Inflation and Lagarde Speech

The euro rallied against the dollar fueled by the risk-on investor sentiment that forced the greenback to fall for the past four sessions as riskier assets soared. The EUR/USD currency pair’s rally was also driven by ECB Governor Christine Lagarde’s upbeat speech earlier today, which boosted the single currency.
The EUR/USD currency pair rose from a low of 1.2108 in the Australian market to a high of 1.2144 in the early Frankfurt session but was slightly off these highs at the time of writing.
The currency pair’s initial rally was fueled by the elevated investor risk appetite that has dominated the markets so far this week. The release of the upbeat German final consumer price index report for January also boosted the pair. According to the Federal Statistical Office, Germany’s inflation rose 1.0% in January meeting consensus estimates. Christine Lagarde’s speech later in the day helped the pair stay in positive territory. The European Central Bank President said that the ECB could scale up its Pandemic Emergency Purchase Programme (PEPP) if the need arises. News that Germany was planning to extend the coronavirus lockdown measures up to March 14 capped the pair’s gains.
The release of the downbeat US consumer price index report for January by the Bureau of Labor Statistics also boosted the pair. The greenback as tracked by the US Dollar Index fell towards its daily lows on the news.
The currency pair’s future performance is likely to be affected by tomorrow’s German and US macro reports.
The EUR/USD currency pair was trading at 1.2129 at 19:05 GMT having rallied from a low of 1.2108. The EUR/JPY currency pair was trading at 126.95 after rising from a low of 126.64.
If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

Original from: www.earnforex.com