CURRENCY NEWS: Euro unfazed by region’s inflation data, rises against the USD

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THE euro soared versus the US greenback Monday, taking analysts by surprise who disclosed the development should be falling following data that bared euro-zone inflation falling to the lowest mark since 2009. But the US dollar rose against the Japanese yen on hopes for easing in the Chinese market.

The Euro Zone’s inflation dipped to 0.5 percent on yearly basis in March, falling from 0.7 percent in February, based on preliminary data on Monday. That is far from the target of the European Central Bank of only below 2 percent, and economists are so concerned regarding deflation in the euro zone.

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The euro initially dipped on the data, then bounced back to push to just below $1.38. The euro was currently trading around $1.3759 late on Friday.

According to Richard Perry, trade analyst at the Hantec Markets, “the move is easing a bit at the moment, but the economic data should be negative for the euro zone.”

Perry added that “perhaps the market does not believe that the central bank would act this Thursday?”

Analysts disclosed that the euro could also be gaining support from Bundesbank President Jens Weidmann, who announced during a Saturday press conference in Berlin that the euro zone is not in deflation and the central bank expects to recover and perhaps push prices back up.

Senior analyst at FxPro Angus Campbell also bared that the inflation data is not likely to spur financial easing from the ECB, and the euro looks well backed until that development comes.

Meanwhile, the US greenback soared to 103.22 yen, from ¥102.82 late Friday, a level not seen in over two weeks.

Some analysts said these gains come from hopes for stimulus in the Chinese market, which is pushing money out of the safe havens of the yen and into unstable assets. March has seen the US greenback gain 1.4 percent versus the yen.

About Chris Miranda

Chris writes mostly about the latest in the stock market, finance, tech and business.
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