Euro Retreats Following Eurozone Consumer Inflation
November 16 2018 - 1:41AM
RTTF2
The euro retreated from its early highs against its major
counterparts in the European session on Friday, after the release
of inflation data from the euro area, which came in line with the
flash estimate in October.
Final figures from Eurostat showed that Eurozone inflation
accelerated in October at the fastest pace in almost six years, as
estimated initially.
The consumer price index rose 2.2 percent year-on-year after a
2.1 percent increase in September. Inflation was the highest since
December 2012.
Inflation again exceeded the European Central Bank's target of
"below, but close to 2 percent".
Core inflation, which excludes prices of volatile items such as
energy, food, and alcohol and tobacco, rose to 1.1 percent from 0.9
percent in September. The flash estimates released on October 31
were thus confirmed.
Speaking at the European Banking Congress in Frankfurt, European
Central Bank President Mario Draghi reaffirmed that asset purchases
would come to an end in December, subject to incoming economic
data.
But uncertainties surrounding the medium-term outlook have
intensified, he cautioned.
"When the latest round of projections is available at our next
meeting in December, we will be better placed to make a full
assessment of the risks to growth and inflation," he said.
European shares were higher despite growing uncertainty
surrounding Brexit.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the greenback and the franc,
it fell against the yen. Against the pound, it held steady.
The euro dropped to 0.8832 against the pound, after rising to
0.8880 at 4:15 am ET. The next possible support for the euro is
seen around the 0.86 level.
Having advanced to a weekly high of 1.1368 against the greenback
at 3:15 am ET, the euro reversed direction and eased to 1.1325. The
euro is likely to find support around the 1.12 level.
The European currency retreated slightly to 1.1410 against the
Swiss franc, from a weekly high of 1.1433 hit at 3:30 am ET. The
euro is poised to find support around the 1.13 level.
The euro reversed from an early high of 128.78 against the yen,
edging down to 128.28. Next likely key support for the euro is seen
around the 126.00 level.
The single currency weakened to 1.4908 against the loonie, after
having advanced to 1.4951 at 4:45 am ET. If the euro weakens
further, 1.47 is possibly seen as its next support level.
Looking ahead, Deutsche Bundesbank President Jens Weidmann will
deliver a speech at the Frankfurt European Banking Congress at 8:00
am ET.
In the New York session, Canada manufacturing sales for
September and U.S. industrial production for October are set for
release.
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