Euro Climbs As Eurozone Inflation Moves Back To ECB Target
April 28 2017 - 2:39AM
RTTF2
The euro advanced against its major counterparts in the European
session on Friday, after data showed that Eurozone inflation
accelerated more than expected to the bank's inflation goal in
April, in a sign of improving economic prospects in the currency
bloc.
Flash data from Eurostat showed that inflation rose to 1.9
percent in April from 1.5 percent in March. Economists had forecast
the annual rate to rise to 1.8 percent.
The headline inflation rate remained within the European Central
Bank's target of 'below, but close to 2 percent'.
Core inflation that excludes energy, food, alcohol & tobacco
accelerated to 1.2 percent from 0.7 percent in March.
Further underpinning the currency was an uptick in Spanish
economic growth in the first quarter.
The statistical office INE said that gross domestic product
climbed 0.8 percent sequentially, slightly faster than the 0.7
percent rise in the fourth quarter. Economists had forecast the
rate to remain unchanged at 0.7 percent.
European stocks are trading mixed as U.S. President Donald Trump
warned of a major conflict with North Korea and investors digested
a raft of corporate earnings reports.
The currency showed mixed performance in the Asian session.
While the euro held steady against the yen and the greenback, it
dropped against the pound and the franc.
The euro appreciated to a 2-day high of 1.0947 against the
greenback, from a low of 1.0857 hit at 9:00 pm ET. The euro is seen
finding resistance around the 1.11 region.
The euro firmed to 122.00 against the Japanese yen, its
strongest since March 17. Continuation of the euro's uptrend may
see it challenging resistance around the 123.00 area.
Data from the Ministry of Land, Infrastructure, Transport and
Tourism showed that Japan's housing starts grew marginally in
March.
Housing starts grew only 0.2 percent year-on-year in March, but
reversed a 2.6 percent fall in February. Economists had forecast
housing starts to drop again by 2.6 percent in March.
The euro having fallen to a 10-day low of 0.8410 against the
pound at 4:00 am ET, reversed direction and rose to 0.8462. The
euro is poised to target resistance around the 0.86 level.
Preliminary estimate from the Office for National Statistics
showed that the U.K. economy expanded at the slowest pace in a year
at the start of 2017.
Gross domestic product grew only 0.3 percent in the first
quarter from prior three months. This was the slowest rate of
growth since the first quarter of 2016.
Reversing from an early 4-day low of 1.0798 against the Swiss
franc, the euro edged up to 1.0843. The next possible resistance
for the euro-franc pair is seen around the 1.10 area.
Survey results from the KOF Swiss Economic Institute showed that
a measure signaling future turning points in the Swiss economy
declined unexpectedly in April to a three-month low, yet the
reading remained above average, suggesting sustained momentum in
the economy.
The KOF leading indicator dropped to 106 from 107.2 in March,
which was revised from 107.6. Economists had forecast a score of
107.5.
The euro rose to 1.4634 versus the aussie, from a low of 1.4528
hit at 8:45 pm ET. The next possible resistance for the euro-aussie
is seen around the 1.48 mark.
The euro strengthened to near a 6-month high of 1.4932 against
the loonie and near a 1-year high of 1.5939 against the kiwi, off
its early lows of 1.4801 and 1.5762, respectively. Further uptrend
may take the euro to resistance levels of around 1.51 against the
loonie and 1.61 against the kiwi.
Looking ahead, U.S. advanced GDP data for the first quarter,
Chicago PMI and University of Michigan's final consumer sentiment
for April, as well as Canada GDP data for February and industrial
product price index for March are set for release in the New York
session.
At 1:15 pm ET, the Federal Reserve Governor Lael Brainard speaks
about Fintech at Northwestern University's Fintech conference, in
Illinois.
The Philadelphia Fed President Patrick Harker delivers a speech
titled "How STEM Can Get You Anywhere," in Washington DC at 2:30 pm
ET.
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