Euro Higher As Eurozone Inflation Accelerates To Near 10-year High
The euro was higher against its most major counterparts in the
European session on Tuesday, as Eurozone inflation jumped to near a
10-year high in August, putting pressure on policymakers to pull
back stimulus measures to prevent an overheating of the
Flash data from Eurostat showed that Eurozone inflation
accelerated more-than-expected in August.
Inflation rose to 3.0 percent in August from 2.2 percent in
July. The rate was above the expected 2.7 percent.
Core inflation that excludes energy, food, alcohol and tobacco
climbed to 1.6 percent in August from 0.7 percent last month.
Economists had forecast a rise of 1.5 percent.
Risk sentiment was underpinned by Fed Chair Jerome Powell's
assurance that the central bank won't rush to raise rates in order
to attain more improvement in the labor market. The prospects of
continued policy support outweighed concerns about the economic
impact of the Delta variant of the virus.
The euro climbed to 1.1832 against the greenback, its highest
level since August 6. The euro is seen finding resistance around
the 1.20 level.
The euro spiked up to a fresh 4-week high of 130.05 against the
yen from Monday's close of 129.65. Next key resistance for the euro
is seen around the 132.00 region.
The euro appreciated to an 8-day high of 0.8592 against the
pound, from a 4-day low of 0.8562 seen at 5 pm ET. Immediate
resistance for the euro is likely seen around the 0.88 level.
In contrast, the European currency pulled back to 1.0801 against
the franc, after rising to nearly a 3-week high of 1.0832 at 3:15
am ET. The euro may locate support around the 1.06 level.
The euro retreated to 1.4869 against the loonie, from a high of
1.4906 set at 10:45 pm ET. The euro is poised to challenge support
around the 1.46 level.
The euro held steady against the kiwi, after having fallen to
nearly a 3-week low of 1.6730 in the Asian session. The pair was
trading at 1.6851 at yesterday's close.
The euro held steady against the aussie, after dropping to a
2-week low of 1.6114 from a 4-day high of 1.6196 logged in the
Asian session. The pair had ended yesterday's trading at
Looking ahead, Canada GDP data for the second quarter, U.S.
consumer confidence index for August, FHFA's house price index and
S&P/Case-Shiller home price index for June will be released in
the New York session.
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