Euro Gains Against Dollar After Weak U.S. Economic Data

Euro Gains Against Dollar After Weak U.S. Economic Data

The Euro traded higher against the US dollar today after trading near flat on Wednesday as meek inflation data in the U.S. pushed rate hike expectations to beyond the first quarter of the year. The pair had touched a low of 1.0868 and was seen trading near 1.0900. Support and resistance for the pair are at 1.0538 and 1.1496 respectively.

Softer data

The U.S. Department of Labor had reported a fall of 0.1% in its Consumer Price Index (CPI) for December, which came just below projections. The CPI showed an increase by 0.7% on an annual basis, implying a 0.5% gain over the previous month. Meanwhile, Core CPI also rose by 2.1% year-over-year.

In Europe, investors are now eyeing the European Central Bank meeting, which is scheduled to take place today, to see what possible easing measures the bank may adopt. Market participants are of the view that the ECB will keep rates unchanged on account of China’s slowdown and the ongoing oil rout.

Other currencies

The safe-haven yen remains a preference for investors after oil prices plunged to $26.50 per barrel. The oil slump continues to weigh on a range of currencies including the Canadian, Aussie, and New Zealand dollars, and especially the Saudi riyal. Softer inflation expectations have sent the Australian dollar lower against the greenback. AUD/USD slipped 0.12% to 0.6898. The Melbourne Institute trimmed down inflation expectations to 3.6% from 4% for the next 12 months. The pair has support at 0.6825 and resistance at 0.6962.

Apart from this, the greenback gained against the British pound this morning. The pair was trading 0.10% down at 1.4175. On Wednesday, the U.K. Office for National Statistics had reported a decline in the unemployment rate to 5.1% over the last three months.

The U.S. Dollar index as a whole traded down by 0.06% to 99.07.