Euro Rallies Despite Dovish ECB Comments and Italy Political Crisis

The euro rallied against the dollar despite a deluge of mostly negative comments and events from across the eurozone that could have derailed its rise. The EUR/USD currency pair rose buoyed by the risk-on market sentiment that saw riskier assets such as stocks rally at the expense of safe-haven assets.
The EUR/USD currency pair fell to a low of 1.2108 in the early Frankfurt session before rallying to a high of 1.2176 during the American market and was near these highs at the time of writing.
The sour market mood fueled the currency pair’s initial decline amid rising coronavirus cases in the eurozone and tough lockdown measures. However, the pair started rallying in the early European session as investors embraced risk sending the dollar lower as tracked by the US Dollar Index. The euro kept rallying after the Italian Prime Minister Giuseppe Conte announced his resignation throwing the country into a political crisis. Investors ignored comments by European Commission President Ursula von der Lyen and EU Trade Commissioner Valdis Dombrovskis who confirmed that the bloc would allow the exportation of coronavirus vaccines from the region.
The release of the US Consumer confidence report of January by the Conference Board had a muted impact on the pair despite the print rising to 89.3 versus December’s 87.1 reading. Dovish comments by ECB policymaker, François Villeroy de Galhau had a muted impact on the pair.
The currency pair’s future performance is likely to be affected by tomorrow’s German GfK consumer survey data.
The EUR/USD currency pair was trading at 1.2167 as at 20:20 GMT having rallied from a low of 1.2108. The EUR/JPY currency pair was trading at 126.09 having risen from a low of 125.68.
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Original from: www.earnforex.com