Eases to C$0.9600/05 area in recent dealings, still amid light flows and seeming intent on testing recent lows at C$0.9595 that have underpinned in recent days. Talk of stops below C$0.9590. Break lower will target C$0.9585/80.
The euro fell against the dollar and yen as concern the region’s debt crisis is getting worse pushed the extra yield investors demand to hold Greek 10-year bonds instead of German debt to a record 1,000 basis points.
“Increased worries about defaults in the periphery are weighing yet again on the euro and a reminder that we’re still not by any means at the end of this crisis,” said David Mann, New York-based head of research in the Americas at Standard Chartered. “It’s also been very tough to stay above the $1.45 level, which is a major psychological level for the market. There are suspected options barriers around that level.”
The yen rallied versus all of its major counterparts on demand for a refuge as China said inflation reached the fastest pace in more than two years, reviving concern the world’s second-largest economy will cool growth. The dollar dropped against the yen as a measure of inflation was lower than economists forecast.
U.S. consumer prices excluding volatile food and fuel costs rose 0.1 percent in March after an increase of 0.2 percent in the previous month, the Labor Department reported. That core figure increased 1.2 percent from a year earlier.
“Consumer prices don’t do much to change the steady outlook for Fed policy,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency-exchange network.
The euro has gained 8 percent versus the dollar this year on bets accelerating inflation will prompt European policy makers to raise interest rates further even as nations such as Greece and Ireland try to reduce their debt burdens.
Support 3: Chf0.8700
Current price: $1.6325
Support 3: $1.6180
Support 3: $1.4240
Empire State index topped expectations, but dollar holds tight. EUR/USD trades at $1.4413, GBP/USD - at $1.6340, USD/JPY - at Y83.17.
Data released
04:30 Japan Industrial output (February) final 1.8% 0.4% 0.4%
04:30 Japan Industrial output (February) final Y/Y 2.9% 2.8% 2.8%
09:00 EU(17) Harmonized CPI (March) final 1.4% 1.2% 0.4%
09:00 EU(17) Harmonized CPI (March) final Y/Y 2.7% 2.6% 2.4%
09:00 EU(17) Harmonized CPI ex EFAT (March) Y/Y 1.3% 1.1% 1.0%
09:00 EU(17) Trade balance (February) unadjusted, bln -1.5 -4.2 -14.8
09:00 EU(17) Trade balance (February) adjusted, bln -2.4 - -3.1 (-3.3)
The euro fell against the dollar, yen and pound after Moody’s Investors Service lowered Ireland’s credit rating, stoking concern that Europe’s debt crisis may worsen as Greece battles to avoid a bond restructuring.
The Moody’s cut Ireland to the lowest investment grade and indicated more downgrades may follow.
Europe’s currency fell to an almost one-week low against the dollar yesterday after Germany’s finance minister and Standard & Poor’s said Greece may need to restructure debt to avoid defaulting. Greece will announce more than 22 billion euros of deficit-reduction measures through 2014 today, according to Finance Minister George Papaconstantinou.
The euro has still gained 8% versus the dollar this year on bets accelerating inflation will prompt euro-area policy makers to raise interest rates, even as the so-called peripheral nations struggle to reduce their debt burdens.
The euro stayed lower even as a report showed inflation in the 17-nation euro-region accelerated more than forecast to 2.7% in March, the fastest pace in more than two years.
The European Central Bank raised its key rate last week to 1.25% from a record low 1% and indicated further increases may follow. The Fed has kept its target rate for overnight lending between banks at zero to 0.25% since December 2008.
The yen rallied after China said inflation reached the fastest pace in more than two years, spurring demand for a refuge.
China’s economy grew 9.7% in the first quarter, while consumer prices increased 5.4% in March from a year earlier. The median forecasts were for economic growth of 9.4% and inflation of 5.2%.
EUR/USD fell from $1.4500 to $1.4440. Rate remains under pressure.
GBP/USD holds within the $1.6310/70 range.
USD/JPY printed lows at Y82.90 before recovered to Y83.50. Currently rate holds around Y84.25.
The U.S. consumer-price index climbed 0.5% in March, matching the previous month’s reading, which was the biggest gain since June 2009, a survey showed before the Labor Department data today. Excluding volatile food and fuel costs, so-called core prices may have advanced 0.2% in March for a third month.
Fed Chairman Ben S. Bernanke last week said an acceleration in inflation is likely to be transitory. Fed Bank of Richmond President Jeffrey Lacker said yesterday the central bank should end its stimulus programs before inflation picks up.
Pierpont Securities says core infl has started rising, a reason to move up Fed's tightening timetable. Pierpont est Mar core CPI +0.2%.
EUR/USD holds around $1.4461 as it fails to hold onto the react gains seen after release of stronger than forecast EMU CPI. Earlier rate printed highs of $1.4475. Support seen back in place at the earlier low of $1.4441, with further interest seen at $1.4435/30.
EUR/GBP extends its corrective pullback to challenge reported support/demand around stg0.8830. The cross posted fresh intraday lows at stg0.8828. If rate can clear below this area seen allowing for a retest on Thursday's low at stg0.8808. Currently cross holds around stg0.8836.
Hang Seng -0.02% 24,008.07
The euro erased its decline against the dollar on speculation the sovereign-debt crisis in nations including Portugal and Greece will be contained.
The euro erased its drop as European Union Economic and Monetary Affairs Commissioner Olli Rehn said he’s “quite confident” the financial-aid package being negotiated for Portugal will result in the debt crisis being contained.
The dollar fell to its lowest level this month against the yen as U.S. initial jobless claims unexpectedly rose and producer prices advanced at a slower pace, encouraging the Federal Reserve to keep borrowing costs low. The euro slid earlier as concern Greece will have to restructure its debt pushed its bond yields to record highs.
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