Euro Eases After Weak Eurozone Inflation Data
January 30 2015 - 8:24AM
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The euro eased back against its most major rivals in European
deals on Friday, as European shares fell and data showed that
Eurozone inflation weakened further in January.
Eurozone consumer prices declined for the second straight month
in January largely due to lower energy prices, posting the biggest
annual fall since 2009, a report from Eurostat showed.
The harmonized index of consumer prices in the 19-nation
currency bloc fell 0.6 percent year-on-year in January, with a
similar rate of decline last seen only in July 2009. Final data is
due on February 24.
This was the second consecutive fall in prices and exceeded the
0.5 percent drop forecast by economists. Prices were down 0.2
percent in December, which was the first decline since October
2009.
Meanwhile, the euro area jobless rate fell marginally in
December to the lowest rate since August 2012, a separate data from
the same agency showed. The unemployment rate came in at a
double-digit 11.4 percent in December, slightly down from 11.5
percent in November.
Alexis Tsipras, Greek prime minister, is prepared to hold talks
with eurozone leaders today, easing fears of a Greek exit from the
Eurozone.
Joeroen Dijsselbloem, Chair of the group of eurozone finance
ministers, is due to arrive in Athens for talks on revising the
conditions of bailout deal.
"We want to keep Greece in the euro zone, in the European Union,
but that also requires the Greeks to meet their commitments,"
Dijsselbloem said in Amsterdam on the eve of his trip.
The new anti-austerity government, elected on Sunday, intends to
roll back series of austerity measures attached to bailout and
wants to re-negotiate the terms of the EUR 240 billion deal.
The euro pared gains to 1.1291 against the greenback, from an
early high of 1.1363. The next possible downside target for the
euro-greenback pair is seen around the 1.10 zone.
The euro reversed from an early weekly high of 0.7536 against
the Sterling, and fell back to 0.7504. If the euro slides further,
0.74 is likely seen as its next support level.
The euro was trading lower at 133.05 against the yen, down from
an early 2-day high of 134.17. The euro may possibly test support
around the 130.00 mark.
Data from the Ministry of Internal Affairs and Communications
showed that Japan's consumer prices rose 2.4 percent on year in
December, topping expectations for 2.3 percent and unchanged from
November.
Core CPI, which excludes the volatile costs of food, added 2.5
percent
The euro edged down to 1.0407 against the franc in early
European deals and has been moving sideways thereafter. This may be
compared to an early new 2-week high of 1.0523. At yesterday's
close, the pair was worth 1.0446.
Looking ahead, Canada GDP data for November, U.S. advanced GDP
data for fourth quarter and Reuters/University of Michigan's final
consumer sentiment index for January are due in the New York
session.
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