Euro Mixed After Eurozone Inflation, Gross Domestic Product Reports
July 29 2016 - 2:00AM
RTTF2
The euro turned in mixed against its major counterparts in early
European deals on Friday, after the release of mixed economic data
from Eurozone, which showed a pick up in consumer price inflation
in July, whereas the economic growth slowed in the second
quarter.
Flash estimate from Eurostat showed that Eurozone economic
growth eased in the second quarter.
Gross domestic product climbed 0.3 percent from the first
quarter, when it grew 0.6 percent. The rate came in line with
expectations.
On a yearly basis, economic growth eased marginally to 1.6
percent from 1.7 percent. It was expected to grow 1.5 percent.
Separate data showed that Eurozone consumer prices increased for
the second straight month in July.
Consumer prices climbed 0.2 percent year-on-year, following a
0.1 percent rise in June. Prices were expected to rise again by 0.1
percent.
Core inflation that excludes energy, food, alcohol and tobacco
held steady at 0.9 percent in July. Economists had forecast
inflation to slow to 0.8 percent.
European markets are higher, with the banks pacing the gains
amid upbeat earnings results.
The currency was lower against most major opponents in Asian
deals, amid rising risk aversion, as the Bank of Japan expanded
purchases of exchange-traded funds but left its policy rate
unchanged, falling short of investors' expectations.
The euro held steady against the Japanese yen, after touching
more than a 2-week low of 113.92 in Asian deals. This may be
compared to a 2-day high of 116.87 set at 11:30 pm ET. The pair was
valued 116.58 when it finished Thursday's trading.
The Bank of Japan raised the target for exchange-traded fund
purchases, while holding its interest rate.
The bank will increase the purchases of exchange-traded funds so
that their outstanding amount will rise at an annual pace of about
JPY 6 trillion.
The single currency strengthened to 1.1103 per greenback,
following a decline to 1.1072 at 11:30 pm ET. The euro is seen
finding resistance around the 1.12 mark.
The euro fell to a 3-day low of 1.0840 against the Swiss franc,
compared to 1.0864 hit late New York Thursday. On the downside, the
euro may possibly locate support around the 1.07 level.
Survey results by the think tank KOF showed that its economic
barometer unexpectedly rose for a second straight month in July to
its highest level in four months, signaling sustained favorable
prospects.
The KOF Economic Barometer rose to 102.7 from 102.6 in June,
which was revised from 102.4. Economists were looking for a lower
score of 101.4.
Bouncing off from an early low of 0.8388 against the Sterling,
the euro edged up to 0.8439. The euro is likely to find resistance
around the 0.86 zone.
Data from the Bank of England showed that U.K. mortgage
approvals declined to a one-year low in June.
The number of mortgages approved in June fell to 64,766 in June
from 66,722 in May. This was the lowest since May 2015, when
approvals totaled 64,174. It was forecast to drop to 65,500 in
June.
Looking ahead, Canada industrial product price index for June
and GDP data for May, as well as the U.S. advanced GDP data for the
second quarter, Chicago manufacturing survey results for July and
University of Michigan's final consumer sentiment for July are to
be released in the New York session.
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