Euro Rises As Eurozone Core Inflation Beats Forecasts
The euro strengthened against most major rivals in the European session on Friday, as the Eurozone annual core inflation rose more than expected in February.
Final data from Eurostat showed the core HICP that excludes fresh food, alcohol and tobacco and energy prices rose 0.8 percent annually after a 1 percent increase in the previous month. The core inflation exceeded forecasts for a 0.7 percent rise.
Meanwhile, the harmonized index of consumer prices fell 0.2 percent year-on-year following a 0.3 percent rise in January. The annual rate matched the flash estimate published on February 29.
The latest decline was the first since September and the biggest since February 2015, when prices slid 0.3 percent.
Separate data from the Eurostat showed that the Eurozone trade surplus increased more than forecasts in January.
The trade surplus rose to a seasonally adjusted EUR 21.2 billion, higher than expectations for an increase of EUR 19.5 billion. In December, the trade surplus strengthened to EUR 22.5 billion.
The currency showed mixed performance in Asian deals. While the euro held steady against the greenback and the franc, it rose against the pound. Against the yen, it trended lower.
In the European session, the euro rose to a 5-week high of 1.1342 against the greenback and nearly a 3-week high of 0.7911 against the pound, from early lows of 1.1205 and 0.7850, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.14 against the greenback and 0.80 against the pound.
The single currency hit a 6-day high of 1.0995 against the Swiss franc, after having fallen to 1.0957 at 5:00 pm ET. On the upside, the euro may locate resistance around the 1.15 mark.
Against the Australian, the New Zealand and the Canadian dollars, the euro advanced to 1.4852, 1.6635 and 1.4743 from an early 3-day low of 1.4712, weekly lows of 1.6496 and 1.4618, respectively. The euro may test resistance near 1.50 against the aussie, 1.68 against the kiwi and 1.50 against the loonie.
The euro bounced off to 126.19 against the yen, from an early low of 125.61. This may be compared to a 2-day high of 126.62 hit at 8:30 pm ET.
Looking ahead, the Bank of England will announce its interest rate decision at 8:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.50 percent and asset purchase target at GBP 375 billion.
In the New York session, Canada wholesale sales data for January, U.S. weekly jobless claims for the week ended March 12, U.S. current account data for the fourth quarter, Federal Reserve Bank of Philadelphia manufacturing index for March and U.S. leading indicators for February are slated for release.
The material has been provided by InstaForex Company - www.instaforex.com
