Euro Rallies on Asian Nations Trade Deal Later Falls on ECB Speeches

The euro today alternated between gains and losses and gains against the dollar rallying on the news such as the trade deal between China and 14 Asia-Pacific countries. The EUR/USD currency pair later gave up most of its gains after speeches from several European Central Bank policymakers that were quite dovish later in the day.
The EUR/USD currency pair today surged to a high of 1.1868 in the early Frankfurt session before falling to a low of 1.1814 in the early American market but had recouped some of its losses at the time of writing.
The currency pair’s initial rally was fueled by the signing of the free trade deal between China and 14 other Asia-Pacific nations including Japan, South Korea, and Australia. The deal known as the Regional Comprehensive Economic Partnership (RCEP) will ease the flow of goods and services between the signatories representing up to 30% of global economic output. The single currency also benefitted from the optimism about coronavirus vaccines following news of Moderna’s COVID-19 vaccine with a 94.5% success rate. The pair kept falling despite the release of the in-line Italian consumer price index report for October by Istat.
The currency pair’s decline was also fueled by dovish speeches from the ECB’s Luis De Guindos, Mario Centeno and Yves Mersch. The speakers called for more quantitative easing measures from the central bank. A statement by European Commission President Ursula von der Lyen on Moderna’s COVID-19 vaccine also boosted the pair.
The currency pair’s future performance is likely to be affected by US dollar dynamics and geopolitical events.
The EUR/USD currency pair was trading at 1.1841 as at 17:18 GMT having rallied from a low of 1.1814. The EUR/JPY currency pair was trading at 123.80 having dropped from a high of 124.43.
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Original from: www.earnforex.com