Euro Climbs After Eurozone Consumer Inflation, Unemployment Reports
January 31 2018 - 1:48AM
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The euro advanced against its major counterparts in the European
session on Wednesday, as Eurozone inflation rose in line with
expectations in January, while unemployment rate remained at the
lowest level in 8 years in December.
Flash data from Eurostat showed that Eurozone inflation grew 1.3
percent, in line with expectations, but weaker than December's 1.4
percent.
Inflation continues to stay below the European Central Bank's
target of 'below, but close to 2 percent'.
Excluding energy, food, alcohol and tobacco, core inflation rose
marginally to 1 percent from 0.9 percent in December. The rate came
in line with expectations.
Separate data from the same agency showed that the euro area
unemployment rate held steady at the lowest level in 8 years in
December.
The jobless rate remained stable at seasonally adjusted 8.7
percent, the lowest since January 2009.
Data from Destatis showed that Germany's retail sales declined
unexpectedly in December.
Retail sales fell 1.9 percent year-on-year in December, in
contrast to November's 4.3 percent increase.
European shares were mixed as investors digested mixed earnings
and economic releases and looked ahead to the outcome of the
Federal Reserve's latest two-day monetary policy meeting concluding
later in the day.
Some economists expect the central bank to raise its economic
assessment at Fed Chair Janet Yellen's final meeting.
The currency has been trading higher against its major rivals in
the Asian session, with the exception of the pound.
The single currency rose back to 1.1607 against the Swiss franc,
from a low of 1.1577 hit at 5:00 pm ET. If the euro rises further,
it may target resistance around the 1.18 area.
Data from the investment bank UBS showed that Swiss consumption
indicator dropped slightly in December, but remained well above its
long-term average.
The consumption index dropped to 1.69 in December from 1.73 in
November, which was revised up from 1.67.
The euro that closed Tuesday's deals at 134.90 against the yen
spiked up to a 5-day high of 135.46. The euro is seen finding
resistance around the 137.5 level.
Data from the Cabinet Office showed that Japan's consumer
confidence held steady at the start of the year.
The seasonally adjusted consumer confidence index came in at
44.7 in January, the same reading as in December.
Having fallen to 0.8759 against the pound at 2:00 am ET, the
euro reversed direction and climbed to 0.8816. The next possible
resistance for the euro is seen around the 0.89 level.
The 19-nation currency climbed back to 1.2460 against the
greenback, just few pips short of its early 5-day peak of 1.2463.
Continuation of the euro's uptrend may see it challenging
resistance around the 1.26 region.
On the flip side, the euro dropped to a 6-day low of 1.6810
against the kiwi, from a high of 1.6926 hit at 5:45 pm ET. If the
euro slides further, it may find support around the 1.67 level.
The euro edged down to 1.5275 against the loonie, off its early
high of 1.5325. On the downside, 1.51 is possibly seen as the next
support level for the euro.
Following a 5-day high of 1.5415 hit at 9:30 pm ET, the euro
retreated to 1.5363 against the aussie. The euro is likely to
challenge support around the 1.51 region.
Data from the Australian Bureau of Statistics showed that
Australia's consumer prices climbed 0.6 percent on quarter in the
fourth quarter of 2017.
That was shy of expectations for 0.7 percent, although it was
unchanged from the three months prior.
Looking ahead, at 8:15 am ET, ADP private payrolls data for
January is due.
In the New York session, Canada GDP data for November and
industrial product price index for December, as well as U.S.
pending home sales for the same month are set for release.
At 2:00 pm ET, the Fed announces decision on interest rates.
Economists widely expect the benchmark rate to remain unchanged at
a range between 1.25-1.50 percent.
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