Renewed Confidence Boosts EUR/USD

After a quiet holiday‘s trading, the USD fell dramatically overnight against all the other majors with the Euro hitting a yearly high at 1.4490, see chart, and the GBP reaching 1.6570.

The higher yielding currencies benefited from a general increase in traders’ confidence that sparked a renew demand for investments with better returns.

The impressive rally made by the EURO was despite Germany’s Current Account falling to only EUR11B versus the expected EUR10B and its Industrial Outputs dropping to 0.9% against a forecasted 1.6% rise.

Conversely, the posting of UK Industrial Production for July at 0.5%, which easily surpassed the anticipated 0.2%, contributed greatly to this morning’s GBP/USD surge.

A medium event risk is due at 2.00pm EST today with the release of the US Consumer Credit figure for July.

If the current trend prevails through the US trading day, then the EUR/USD could extend its gains to test its next resistance at 1.4530.