- EUR/USD rises to the level last seen on Sept. 1.
- Vaccine optimism keeps the anti-risk dollar under pressure.
- Euro’s rise toward September highs may lose momentum if Germany’s CPI prints estimates.
EUR/USD reached near three-month highs early Monday, with the safe-haven dollar extending recent losses on continued expectations for a swift global economic recovery on potential coronavirus vaccines.
The pair rose to 1.1974 during the Asian trading hours, the highest level since Sept. 1, having charted a bullish outside week candle in the five days to Nov. 27.
EUR/USD looks set to end the month with at least 2% gains. The shared currency has remained better bid throughout the month despite the rising coronavirus cases across Eurozone and economically-painful lockdown restrictions in Germany and France.
Drugmakers Pfizer and Moderna announced positive results of their experimental coronavirus vaccines earlier this month, triggering hopes for global economic recovery and rotation of money out of safe havens such as the US dollar and gold and into risk assets. That helped the EUR ignore coronavirus concerns and score gains against the greenback.
However, the EUR/USD’s ascent is complicating the European Central Bank (ECB) fight against deflation. The central bank is expected to boost monetary stimulus in December, and the dovish expectations would strengthen if the German Consumer Price Index for November prints below estimates.
Due at 13:00 GMT, the preliminary data is expected to show the cost of living in the common currency area dropped by 0.7% month-on-month in November, following October’s 0.1% rise.
The pair’s rise toward the Sept. 1 high of 1.2011 would pick up the pace if the German inflation beats expectations.