The Euro continues to rally in today’s trading session against the greenback hitting a new one month high and even a large selloff in financial markets has failed to boost the US dollar as a safe haven asset.
The European currency has been surging since yesterday after European Central Bank President Christine Lagarde indicated negative interest rates, which has dogged the Eurozone economy for the best part of a decade will probably end over the next few months.
Lagarde noted that interest rates were likely to be in positive territory by the end of the third quarter and how far into positive territory remains to be seen but the words were enough to keep the Euro well supported.
"Many observers will continue to consider the ECB as being too hesitant, but the fact that a lift-off is now very likely to happen in July and that the ECB seems willing to hike rates further after that is positive for the euro," said analysts from Commerzbank
It has been a remarkable 2 weeks for the Euro after hitting a January 2017 low at $1.0349 earlier this month but has since rebounded to $1.0725 in today’s trading session with a total gain of around 3.5 percent.
Looking further ahead today, there is a wave of economic news due out from the US which will be the main drivers of the EUR/USD currency pair starting off with the S&P Global Services PMI figures for May followed by the latest new home sales figure which will be closely watched due to the recent rate hikes by the US Federal Reserve.
The highlight of the day will be the 2 monetary speeches to be delivered by ECB president Christine Lagarde as well as US Fed president Jerome Powell and the focus for investors will be interest rate hikes and when they plan to be delivered.