European Currency Falls Against Dollar And Pound
During early deals on Friday, the European currency edged down against the US dollar and the British pound as the German producer price index posted its biggest drop in 22 years. The euro thus dropped to a 2-day low against the pound.
Germany’s Federal Statistical Office said today that the producer price index or PPI dropped 3.6% year-over-year in May, after falling 2.7% in April. This was the lowest annual rate of PPI since April 1987. The producer prices figure in May came in line with economists’ expectations. A year ago, the PPI had grown 5.3%.
On a monthly basis, the PPI remained unchanged in May, compared with a 1.4% fall in the preceding month.
Adding to euro’s slide, another report showed that Italy’s seasonally adjusted jobless rate rose to 7.3% in the first quarter from an upwardly revised 7% recorded in the final quarter of the previous year. The jobless rate, which is reportedly the highest in three years, matched economists’ expectation.
On an unadjusted basis, the jobless rate stood at 7.9%, the agency said.
On the other hand, the euro showed strength against the Swiss franc and hit a 3-day high versus the Japanese yen.
The European currency lost ground after hitting a high of 1.3949 against the US dollar at 1:25 am ET Friday. The euro-dollar pair is currently trading at 1.3896 with 1.373 seen as the next target level. The pair closed Thursday’s North American session at 1.3903.
The single currency that closed Thursday’s North American session at 0.8514 against the British pound reached a high of 0.8532 at 2:05 am ET Friday. Thereafter, the euro-pound pair reversed its direction and is presently trading at a 2-day low of 0.8486, compared to 0.8514 hit late New York Wednesday. The next downside target level for the pair is seen around 0.851.
Against the Swiss franc, the 16-nation currency edged higher during Friday’s early deals. At 3:25 am ET, the euro-franc pair climbed to 1.5129, moving from an early Asian session low of 1.5098. If the pair gains further, 1.523 is seen as the next target level. The pair closed Thursday’s New York deals at 1.5104.
The euro traded higher against the Japanese yen during today’s early deals. At 2:35 am ET, the euro-yen pair rose to a 3-day high of 135.06, compared to Thursday’s closing value of 134.21. On the upside, 138.3 is seen as the next target level. The pair is currently quoted at 134.98.
The Bank of Japan today released the minutes of its policy board meeting held May 21-22. Minutes of the meeting showed that some Bank of Japan policy board members said the timing of the termination of temporary measures to increase liquidity depends on market conditions.
“Some members said that whether or not the bank would continue with various temporary measures, which were to be terminated on or after Sept. 30, should be determined based on close examination of developments in financial markets and corporate financing,” the summary of meeting discussions said.
