Euro Weakens As Eurozone Inflation Hits 1-yr Low
04 June 2019 - 05:23PM
RTTF2
The euro was lower against its most major counterparts in the
European session on Tuesday, after a data showed that Eurozone
inflation eased more than expected in May to its lowest level in
over a year, putting pressure on the European Central Bank policy
makers to do more to stimulate the economy when they meet this
week.
Flash estimate from Eurostat showed that inflation slowed to 1.2
percent in May from 1.7 percent in April, while economists had
predicted a 1.5 percent price growth.
The latest inflation rate was the lowest since April last year,
when it was at the same level.
The rate fell even further from the ECB's inflation goal of just
below 2 percent.
Core inflation, which excludes prices of energy, food, alcohol
& tobacco, eased to 0.8 percent from 1.3 percent. Economists
had expected a rate of 1.1 percent. In March, core inflation was
0.8 percent.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the greenback and the franc,
it held steady against the yen and the pound.
The euro dropped to 1.1240 against the greenback, from a
1-1/2-month high of 1.1277 hit at 3:00 am ET. The euro is seen
testing support around the 1.11 region.
After rising to near a 5-month high of 0.8902 against the pound
at 3:45 am ET, the euro retraced gains with the pair trading at
0.8876. If the euro drops further, 0.87 is possibly seen as its
next support level.
Survey data from IHS Markit showed that the UK construction
activity contracted unexpectedly in May.
The IHS Markit/Chartered Institute of Procurement & Supply
construction Purchasing Managers' Index fell to 48.6 in May from
50.5 in April.
The euro eased back to 121.49 against the Japanese yen, from a
4-day high of 121.73 touched at 3:15 am ET. The euro is likely to
test support around the 119.00 region.
Data from the Bank of Japan showed that Japan monetary base rose
3.6 percent on year in May, coming in at 510.808 trillion yen.
That's up sharply from the 3.1 percent increase in April.
The euro was trading at 1.7056 against the kiwi and 1.6104
against the aussie, down from its early high of 1.7099 and a weekly
high of 1.6162, respectively. Further downtrend may take the euro
to support levels of around 1.68 against the kiwi and 1.59 against
the aussie.
The single currency pared gains to 1.5101 against the loonie,
from a high of 1.5140 set at 3:00 am ET. Next key support for the
euro is seen around the 1.50 level.
The euro held steady at 1.1176 against the franc, after having
retreated from a high of 1.1190 seen at 3:45 am ET. At Monday's
close, the pair was worth 1.1156.
Looking ahead, the U.S. factory orders and durable goods orders
for April will be out in the New York session.
Euro vs AUD (FX:EURAUD)
Forex Chart
From Feb 2024 to Mar 2024
Euro vs AUD (FX:EURAUD)
Forex Chart
From Mar 2023 to Mar 2024