Euro Rate Today: Warnings that Euro/Dollar Rally is Starting to Look Stretched, GBP/EUR in Relief Rally

• The euro dollar exchange rate is 0.15 pct higher on a day-to-day basis; EUR/USD is at 1.3576.
• The euro pound exchange rate is 0.3 pct lower at 0.844.
• The euro Australian dollar exchange rate is 0.35 pct higher at 1.4579.

* Please note that the above quotes are derived from the wholesale spot markets. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.

The euro has failed in its bid to break fresh ground against the pound sterling and we are seeing the UK currency move higher.

Against the US dollar however we see that the shared currency continues to maintain a positive tone.

"The euro spent some time above 1.36, and the dollar has done pretty well to push it below this mark for now. This week is an interesting one for the euro and some positive figures from the eurozone should see current EUR/USD levels tested," says Sasha Nugent at Caxton FX.

For now the dollar is hanging on, and the battle between these two currencies may get even more interesting as potential safe haven appeal takes on eurozone optimism.

The euro is starting to look stretched

This morning we hear from the team at Lloyds Bank Research who warn that the euro's rally against the US dollar is starting to look stretched:

"We doubt a lack of dovishness or opposition to the recent strength of EUR from Draghi is a sufficient argument to be bullish EUR. EUR positioning was significantly net long in the week to 24th September, the highest level since May 2011.

"The government shutdown has meant there has been no update to the IMM data but given the move higher in EUR/USD since then, EUR long positions are likely to have extended further.

"Little progress from the US over the weekend does suggest an EUR upside bias against USD, and some scope for a move towards the year highs of 1.3711. However we think EUR/USD is starting to look stretched and is perhaps vulnerable to a reversal."

US political stalemate should keep Euro supported vs US dollar

Any declines against the US dollar will likely be shallow amidst the current political uncertainty.

"The pair may remain supported on dips pending further US fiscal developments this week with support seen towards 1.3500 before 1.3450. The ECB’s Draghi is expected to speak this week and expect the resulting rhetoric to remain sufficiently dovish, although inherent USD weakness may continue to prevail for the pair," says Emmanuel Ng at OCBC Bank.