The euro traded in a negative territory in European deals on Tuesday, as consumer price inflation in the euro area rose less-than-expected in December, far away from the European Central Bank’s target despite its quantitative easing stimulus measures.
Flash data from Eurostat showed that consumer prices advanced 0.2 percent year-on-year in December, the same rate as seen in November but below the 0.4 percent rate forecast by economists.
Headline inflation has been below the European Central Bank’s target of ‘below, but close to 2 percent’ since early 2013.
Excluding energy, food, alcohol and tobacco, core inflation held steady at 0.9 percent in December. Energy prices slid 5.9 percent, but slower than the 7.3 percent decrease seen in November
European markets also declined following the weak Eurozone inflation data. Fears over a slowdown in China and its impact on global economy made investors wary.
In other economic news, data from the Federal Labor Agency showed that Germany’s unemployment declined more than expected in December.
The number of people out of work declined by 14,000 compared to an expected drop of 8,000.
The euro held steady against its major rivals in Asian trading.
In European deals, the single currency declined to 1.0765 against the greenback, its lowest since December 3. This is a 0.59 percent slide from Monday’s closing quote of 1.0829. The euro is seen finding support around the 1.06 region.
The 19-nation currency lost 1.04 percent against the yen to hit 127.98, its weakest since April 20, 2015. The pair ended Monday’s trading at 129.32. If the euro-yen pair continues slide, 126.00 is possibly seen as its next support level.
The euro pared gains to 1.0841 against the Swiss franc, from a high of 1.0859 hit in Asian trading. On the downside, the euro may challenge support around the 1.07 level.
The euro edged down to 1.5006 against the loonie, a 0.69 percent decline from Asian session’s high of 1.5110. Continuation of the euro’s downtrend is likely to take it to a support around the 1.48 zone.
The euro was trading at 0.7344 against the pound, staying closer to near a 2-week low of 0.7331 hit a short while ago. At yesterday’s close, the pair was worth 0.7356. The next possible support for the euro-pound pair is seen around the 0.725 zone.
Survey results from Markit showed that the U.K. construction sector strengthened more than expected in December.
The Chartered Institute of Procurement & Supply/Markit Purchasing Managers’ Index rose to 57.8 in December from a seven-month low of 55.3 in November.
Looking ahead, Canada industrial product price index for November is due in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com