EUR/USD edges up past 1.1850 area amid a moderate dollar weakness

The euro has ticked up for the third consecutive day on Monday, reaching session highs at 1.1870 area with the USD on a moderate sell tone amid the positive market mood.

USD pulls back as market sentiment brightens

The euro has been favoured by a weaker USD amid the broad risk rally triggered by the positive Chinese macroeconomic data and the promising results of Moderna’s vaccine tests.

Market sentiment was lifted on the Asian session as the better than expected Chinese industrial production and foreign investment figures confirmed that China’s economic recovery is picking up pace.

Somewhat later, the drugmaker Moderna announced that its COVID-19 vaccine is 94.5% effective which boosted market sentiment triggering solid advances in the main equity indexes. In this backdrop, the safe-haven USD has pulled down against its main rivals, although the up-tick on US Treasury yields has avoided further dollar weakness.

The euro, though, has been weighed by the dovish comments of  ECB policymaker, Pablo Hernandez de Cos. In an event on Monday, Hernandez de Cos has pointed out that foreign exchange moves between the euro and the dollar are something to worry about and has endorsed further monetary accommodation to avoid market fragmentation given the worsening economic and inflation outlook. 

Technical  levels to watch