EUR/USD Trades In Green After Euro Zone Inflation Reports
The euro was trading in green versus the dollar on Thursday’s trading session. The single currency gained some momentum after the inflation report showed that the rate of Inflation in France rose to 0.5%last month compared to 0.3% in September. The reported rate of inflation in France came better than the forecast of 0.4%. The prices remained flat month-over-month basis.
The rate of inflation in Germany stayed weaker at 0.8% in October. However, the prices decline 0.3% from the previous month.
EUR/USD was trading with gains of 0.15% to 1.2456, holding above last week’s 26-month lows of 1.2356.
In the other report released in Spain, the consumer price index declined 0.1% in the month of October compared to a year ago. However, the consumer prices rose up 0.5% in October compared to 0.2% in September. The data highlights the problem of low levels of inflation in the euro zone area. The ECB is making all efforts to achieve its inflation target of around 2%.
The demand for the dollar remained supported as the Fed and its major peers shares a diverging monetary policy outlook in the coming quarters.
The ECB had reduced rates to new lows in September. Also, it induced fresh stimulus measures to boost inflation and growth. It is a contrarian step by the ECB compared to the Fed who intends to hike interest rate in next year. The hopes of rate hike are getting stronger as the data supports the strength in economic recovery.
The euro was also trading in green against the yen. The EUR/JPY was trading at 143.98, up 0.23%. The yen was under pressure as there is undergoing speculation about a snap election in December. Also, the market is speculating that the proposed sales tax increase planned in October 2015 can be postponed.
The U.S. will report weekly data on initial jobless claims later in the day.
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