Euro Rallies Despite Weak German Retail Sales, Buoyed by Dovish Fed Speeches

The euro initially fell against the dollar on weak investor sentiment combined with disappointing retail data from Germany but later recovered and rallied higher. The EUR/USD currency pair rallied higher despite dovish comments from European Central Bank policymakers who dislike the rising euro area bond yields.
The EUR/USD currency pair fell to a low of 1.1992 in the early Frankfurt session before recovering and rallying to a high of 1.2089 in the American market and was trading near these highs at the time of writing.
The currency pair’s initial decline was fueled by investor fears that the ECB would expand its quantitative easing measures to curb rising sovereign bond yields in European countries. The release of the downbeat Germany retail sales data for January added to the euro’s woes. According to the Federal Statistical Office, Germany’s retail sales fell 4.5% in January versus the expected 1% decline. Germany’s disappointing January employment change report drove the pair lower. The mixed eurozone preliminary consumer price index report had minimal impact on the pair. According to Eurostat, the region’s inflation grew 0.9%, missing consensus estimates by 0.1%.
The fibre headed higher during the American session as the greenback fell as tracked by the US Dollar Index, which hit a low of 90.74. Dovish comments from the US Federal Reserve members Lael Brainard and Mary Daly, who cautioned against premature tightening, weakened the dollar.
The currency pair’s future performance is likely to be affected by tomorrow’s multiple euro area PMI releases.
The EUR/USD currency pair was trading at 1.2088 at 20:02 GMT, having rallied from a low of 1.1992. The EUR/JPY currency pair was trading at 129.00 after rising from a low of 128.18.
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Original from: www.earnforex.com