The euro weakened against the other major currencies in the early European session on Friday, after data showed that Germany’s producer prices declined at a faster-than-expected pace in February and as the European Central Bank’s Executive Board member Peter Praet told that the central bank could add further stimulus if needed.
Data from Destatis showed that the producer price index fell 3.0 percent year-over-year in February, exceeding economists’ expectations for a 2.6 percent decrease. In January prices had dropped 2.4 percent. The measure has been falling since August 2013.
Month-on-month, producer prices decreased 0.5 percent in February, slower than January’s 0.7 percent fall. The expected rate decline was only 0.1 percent.
While Speaking in an interview, Praet said that the central bank is likely reduce its interest rate if needed.
“As other central banks have demonstrated, we have not reached the physical lower bound,” he told.
In the Asian trading, the euro held steady against its major rivals.
In the early European trading, the euro fell to an 8-day low of 1.0918 against the Swiss franc and a 3-day low of 0.7807 against the pound, from yesterday’s closing quotes of 1.0951 and 0.7829, respectively. If the euro extends its downtrend, it is likely to find support around 1.04 against the franc and 0.76 against the pound.
Against the U.S. dollar and the yen, the euro edged down to 1.1281 and 125.47 from yesterday’s closing quotes of 1.1337 and 126.19, respectively. The euro may test support near 1.11 against the greenback and 122.00 against the yen.
The euro dropped to 1.4662 against the Canadian dollar, from an early high of 1.4713 and held steady thereafter.
Meanwhile, the euro rose to 1.4810 against the Australian dollar, from an early low of 1.4751. The euro is likely to find resistance around the 1.52 area.
Against the NZ dollar, the euro edged up to 1.6565 from an early 8-day low of 1.6475 and held steady thereafter.
Looking ahead, Canada retail sales data for January and CPI data for February, the University of Michigan’s preliminary U.S. consumer sentiment index for March and U.S. Baker Hughes rig count data are slated for release in the New York session.
At 9:00 am ET, Federal Reserve Bank of New York President William Dudley and Fed Boston President Eric Rosengren will deliver opening remarks at the conference on bank supervision, in New York.
At 2:00 pm ET, Federal Reserve Bank of St. Louis President James Bullard is expected to speak at the International Research Forum on Monetary Policy in Frankfurt.
The material has been provided by InstaForex Company – www.instaforex.com