Euro Recovers As Eurozone Inflation Confirmed At 4-month

The euro recouped its early losses against its key counterparts in the European session on Monday, after data showed that Eurozone inflation climbed to a four-month high in August, as initially estimated.

Final data from Eurostat showed that consumer prices advanced 1.5 percent year-on-year in August, faster than the 1.3 percent increase seen in July. This was the highest since April and in line with the estimate published on August 31.

Nonetheless, inflation continues to stay well below the European Central Bank's target of 'below, but close to 2 percent'.

On a monthly basis, consumer prices rose 0.3 percent in August.

Further underpinning the currency was dovish comments by the ECB Chief Economist and Executive Board member Peter Praet, who said in an interview over the weekend that substantial stimulus is still needed to ensure price stability target.

"This autumn we will decide on our policy next year," he added.

Risk sentiment prevailed on easing geopolitical tensions and as S&P Global Ratings raised Portugal's credit rating to investment grade with a stable outlook, helping spur a rally in euro-area peripheral bonds.

Investors await the crucial Fed meeting on Tuesday and Wednesday for clues to the likelihood of a rate hike in December.

The single currency climbed against its major rivals in the Asian session, with the exception of the pound.

The euro that edged down to 1.1915 against the greenback at 3:20 am ET bounced off to 1.1954. The pair ended last week's deals at 1.1919. The next possible resistance for the euro-greenback pair is seen around the 1.23 region.

The single currency recovered to 133.07 against the yen, heading to pierce its early 1-1/2-year high of 133.11. On the upside, 136.00 is possibly seen as the next resistance for the euro-yen pair.

The euro, having fallen to a 2-month low of 0.8779 against the pound at 2:30 am ET, reversed direction and climbed to 0.8830. If the euro-pound pair extends gain, 0.90 is likely seen as its next resistance level.

Data from property tracking website Rightmove showed that U.K. house prices fell 1.2 percent on month in September

That follows the 0.9 percent decline in August, and it marks the third monthly drop in four months.

The euro recovered to 1.4920 against the aussie, 1.4580 against the loonie and 1.6355 against the kiwi, from its early lows of 1.4872 and 1.4513, and near a 4-week low of 1.6270, respectively. The euro is poised to locate resistance around 1.51 against the aussie, 1.48 against the loonie and 1.65 against the kiwi.

On the flip side, the 19-nation currency eased to 1.1451 against the Swiss franc, from a high of 1.1485 hit at 2:45 am ET. If the euro-franc pair extends drop, 1.135 is possibly seen as its next support level.

Looking ahead, U.S. NAHB housing market index for September is slated for release in the New York session.

At 10:30 am ET, ECB Board member Sabine Lautenschlager will participate in Panel II "Policy challenges in the banking sector" at conference "Supervisory policy implementation in the current macro-financial environment: a cross-sectoral journey," organised by BIS in Basel, Switzerland.

At 11:00 am ET, Bank of England Governor Mark Carney gives a lecture at the International Monetary Fund (IMF) in Washington D.C.

At 2:15 pm ET, Bank of Canada Deputy Governor Timothy Lane is expected to speak at the Saskatoon Regional Economic Development Authority in Saskatchewan, Canada.

Euro vs Sterling (FX:EURGBP)
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De Mar 2024 à Avr 2024