Euro Falls As Eurozone Inflation Eases
16 May 2018 - 4:41PM
RTTF2
The euro declined against its major counterparts in the European
session on Wednesday, as Eurozone inflation eased slightly in
April, as estimated.
Final data from Eurostat showed that inflation slowed to 1.2
percent in April from 1.3 percent in March. The rate came in line
with the estimate published on May 3.
Inflation continues to stay below the European Central Bank's
target of 'below, but close to 2 percent'.
On a monthly basis, the harmonized index of consumer prices
gained 0.3 percent in April.
Final data from Destatis showed that German consumer price
inflation held steady in April, as previously estimated.
Consumer prices climbed 1.6 percent year-on-year in April, the
same rate of increase as seen in March and in line with the
estimate released on April 30.
Meanwhile, European stocks held steady as firmer commodity
prices and some solid earnings updates helped investors shrug off
North Korea's threat to scrap a historic summit next month between
its leader Kim Jong Un and U.S. President Donald Trump.
The currency has been trading in a negative territory against
its major opponents in the Asian session.
The euro eased back to 0.8760 against the pound, from a high of
0.8783 hit at 4:30 am ET. The currency is thus heading to pierce a
6-day low of 0.8755 set early in the Asian session. On the
downside, 0.86 is likely seen as the next support for the euro.
The 19-nation currency dropped to 1.1801 against the greenback,
its weakest since December 2017. This may be compared to a high of
1.1854 set at 3:30 am ET. If the euro continues its fall, 1.16 is
possibly seen as its next support level.
The euro declined to a 6-day low of 129.99 against the Japanese
yen, compared to 130.63 hit late New York Tuesday. The next
possible support for the euro is seen around the 128.00 level.
Preliminary data from the Cabinet Office showed that Japan's
gross domestic product contracted 0.2 percent on quarter in the
first three months of 2018.
That missed expectations for a flat reading following the
downwardly revised 0.1 percent gain in the three months prior.
Reversing from an early high of 1.1872 against the Swiss franc,
the euro slipped to a new 5-week low of 1.1805. Next key support
for the euro is likely seen around the 1.16 level.
The euro weakened to a 2-month low of 1.5773 against the aussie,
5-day lows of 1.5180 against the loonie and 1.7120 against the
kiwi, off its early highs of 1.5867, 1.5245 and 1.7258,
respectively. The euro is likely to find support around 1.56
against the aussie, 1.50 against the loonie and 1.70 against the
kiwi.
Looking ahead, the European Central Bank President Mario Draghi
will give remarks at an ECB event held in honor of Vítor Constâncio
in Frankfurt at 8:00 am ET.
Canada manufacturing sales for March, U.S. housing starts,
building permits and industrial production for April are scheduled
for release in the New York session.
At 8:30 am ET, Atlanta Fed President Raphael Bostic speaks about
the economic outlook at the Augusta Cotton Exchange.
The Bank of Canada Deputy Governor Lawrence Schembri will speak
at a luncheon hosted by the Chartered Financial Analyst Society of
Ottawa and the Ottawa Economics Association at 12:00 pm ET.
Simultaneously, the Swiss National Bank Governing Board Chairman
Thomas Jordan delivers a speech about the Sovereign Money
Initiative at a Vollgeld event in Zurich.
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