The euro is close to a 10-week low versus dollar on Monday, following a dull euro zone inflation data revitalized speculation the European Central Bank (ECB) may ease policy to turn away deflation. Concerns on capital flight from emerging economies also kept traders away from risk assets, bolstering the yen over growth-sensitive and high-yielding currencies. The euro listed at $1.3489 on Monday, near from its low of $1.3479 on Friday, the lowest rate since late November.
The common currency reached a two-month low of 137.38 yen, pointing towards the peril of settling below the 100-day moving average, now at 137.54 yen, which several analysts could consider as a leading bearish signal. The latest catalyst for the euro’s slip was its zone inflation information released on Friday, which reported a surprise easing to 0.7% in January year-on-year, comparing a four-year low in October. Analysts had anticipated an increment to 0.9% from 0.8% last December.
Given that the ECB shocked markets by cutting down rates in November, a week after the same inflation facts reported a 0.7% reading, speculation is thick that the ECB could look at some other monetary relief as soon as at its policy meeting on Thursday.
On the other hand, US economic data on consumption was fairly potent, strengthening views the world’s largest economy can endure the emerging markets upheaval, permitting the US Federal Reserve to keep reducing its stimulus. That kept the dollar index near its two-month high set late last month. The index of the dollar’s rate against six other key currencies was at 81.271, lower than the 81.388 value on January 21.
The dollar could yield more ground if the Institute for Supply Management’s closely monitored the information due at 3:00 p.m. GMT points to firm growth in the US manufacturing. The dollar gained 0.3% to 102.34 yen, as Japanese importers purchased the dollar on sinks, following the yen’s profits on fears about emerging markets. But the US currency remains the same in an eight week low of 101.77 yen on Monday, as investors stayed on guard of emerging economies. Since late last month, the expectation of slacking the US monetary stimulus and sluggish growth in China have elevated anxiety of capital flight in few emerging economies which depend on foreign capital.
Although many of these currencies, including the Turkish lira and South African rand, snapped late last week, capitalists are uncertain if the worst is finished.
The material has been provided by InstaForex Company – www.instaforex.com
The euro is close to a 10-week low versus dollar on Monday, following a dull euro zone inflation data revitalized speculation the European Central Bank (ECB) may ease policy to turn away deflation. Concerns on capital flight from emerging economies also kept traders away from risk assets, bolstering the yen over growth-sensitive and high-yielding currencies. The euro listed at $1.3489 on Monday, near from its low of $1.3479 on Friday, the lowest rate since late November.
The common currency reached a two-month low of 137.38 yen, pointing towards the peril of settling below the 100-day moving average, now at 137.54 yen, which several analysts could consider as a leading bearish signal. The latest catalyst for the euro’s slip was its zone inflation information released on Friday, which reported a surprise easing to 0.7% in January year-on-year, comparing a four-year low in October. Analysts had anticipated an increment to 0.9% from 0.8% last December.
Given that the ECB shocked markets by cutting down rates in November, a week after the same inflation facts reported a 0.7% reading, speculation is thick that the ECB could look at some other monetary relief as soon as at its policy meeting on Thursday.
On the other hand, US economic data on consumption was fairly potent, strengthening views the world’s largest economy can endure the emerging markets upheaval, permitting the US Federal Reserve to keep reducing its stimulus. That kept the dollar index near its two-month high set late last month. The index of the dollar’s rate against six other key currencies was at 81.271, lower than the 81.388 value on January 21.
The dollar could yield more ground if the Institute for Supply Management’s closely monitored the information due at 3:00 p.m. GMT points to firm growth in the US manufacturing. The dollar gained 0.3% to 102.34 yen, as Japanese importers purchased the dollar on sinks, following the yen’s profits on fears about emerging markets. But the US currency remains the same in an eight week low of 101.77 yen on Monday, as investors stayed on guard of emerging economies. Since late last month, the expectation of slacking the US monetary stimulus and sluggish growth in China have elevated anxiety of capital flight in few emerging economies which depend on foreign capital.
Although many of these currencies, including the Turkish lira and South African rand, snapped late last week, capitalists are uncertain if the worst is finished.
The material has been provided by InstaForex Company – www.instaforex.com
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