Euro tumbles after weak inflation data

31 October, 2013

The euro took a tumble against the US dollar and the yen today as a result of weak data, especially CPI data released during the European session.

Euro zone inflation was far weaker than expected, with the flash CPI estimate dropping to 0.8% on the core figure and 0.7% on headline inflation. Weak German retail sales, rising Euro zone unemployment are all also contributing to euro’s weakness.

EURUSD opened in Europe at $1.3704 and slid towards the key psychological $1.3600 level. EURJPY fell 0.7% from the European session open of 134.72 towards 133.80 yen.

Sterling was flat against the dollar, with GBPUSD having traded in a narrow range in both the Asian and European Sessions, just above the key $1.6000 level.

Meanwhile, data from the UK was mixed – UK Nationwide Housing prices rose 1.0% but GfK consumer confidence weakened.

The US dollar retraced some of its gains made against the yen from late Wednesday when it was propelled higher after the Federal Reserve monetary policy statement that quantitative easing will continue.

USDJPY move off the post-FOMC high of 98.66 yen to edge lower in Asian and European trading today to reach a low of 98.15 where it steadied.

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