Euro Rallies on Upbeat Sentiment, Positive Euro Area PMIs and Weak Dollar

The euro rallied higher, boosted by the positive manufacturing PMI prints from across the euro area released by Markit Economics in the early European session. The EUR/USD currency pair also benefitted from the dollar’s overall weakness driven by falling US 10-year Treasury yields and the upbeat investor risk appetite.
The EUR/USD currency pair rallied from a low of 1.1713 in the early Frankfurt market to a high of 1.1780 in the American session and was trading near these highs at the time of writing.
The currency pair initially dipped lower before investor sentiment shifted in favour of the single currency. The release of the disappointing German retail sales data for February had a muted impact on the pair. According to the Federal Statistical Office, Germany’s retail sales rose 1.2% in February versus expectations of a 2% increase. The release of the in-line Markit/BME Germany Manufacturing PMI and the Markit Italy Manufacturing PMI also boosted the euro. The upbeat Markit Eurozone Manufacturing PMI also supported the pair’s rally. Investors ignored the new lockdown measures in France and other European countries. The lagging COVID-19 vaccination numbers in Europe also did not faze traders.
The fibre edged higher, boosted by the disappointing US initial jobless claims report. The upbeat ISM US Manufacturing PMI, which beat analysts expectations by a wide margin, had a muted impact on the pair. The dollar’s overall weakness, as tracked by the Dollar Index, fueled the pair’s rally.
The currency pair’s future performance is likely to be affected by the release of US non-farm payrolls tomorrow.
The EUR/USD currency pair was trading at 1.1768 at 18:46 GMT after rallying from a low of 1.1713. The EUR/JPY currency pair was trading at 130.17, having risen from a low of 129.65.
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Original from: www.earnforex.com