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Euro falls to 6 week low, pressured by USD bulls

Price growth in the Euro zone weakened in June on a monthly basis, showing the region remains vulnerable to deflation pressures, the final CPI reading showed on Thursday.

The CPI reading in the euro area came in at 0.2% in the sixth month of the year on an annual basis, after 0.3% growth recorded in the previous month. Meanwhile, core inflation hit 0.8%, a slight decline when compared to last month's reading of 0.9%. Further data showed the trade surplus shrunk to a seasonally adjusted €21.2 billion during May, down from €24.3 billion. 

The prospects of a Fed rate hike being in sight pushed the dollar higher across the board, overshadowing the Greek "yes" vote. The Greek parliament approved the legislation that includes tough economic measures required to unlock the €86bn in euro zone bailout funds.

Greece and downgrading the inflation outlook is the likely scenario to stem from the ECB's meeting in Frankfurt on Thursday.

The Euro has now stopped its free-fall after it made a double top near the resistance of the $1.1200 area.

The break and retesting of the very important support zone of $1.11-1.1080 opened the door to much lower prices and the nearest support is seen round $1.0900 level.

Pair is likely to touch $1.0842, 61.8% Fibonacci retracement level.

 

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