Euro Falls to 11 Day Low After German Inflation Miss

The euro slipped to a 11-day low against the dollar on Monday after German inflation data came in slightly weaker than expected, which took some pressure off the European Central Bank to wind down its stimulus programme.

Having earlier traded lower on concerns over a travel ban implemented by U.S. President Donald Trump, the euro’s fall helped the dollar index – which measures the greenback against a basket of other major currencies – climb half a percent to above 101 for the first time in 10 days.

The latest figures showed German consumer price inflation hit 1.9 percent in January. While that was the highest in three-and-a-half years, it was slightly below forecasts for a 2 percent annual rise.

A sustained recovery in German inflation would give Bundesbank President and ECB rate-setter Jens Weidmann more scope to argue for winding down the ECB’s bond-buying programme more quickly.

Against the yen, though, the dollar remained weak, trading down 0.4 percent at 114.27 yen by 1300 GMT, as investors sought the traditional security of the Japanese currency after U.S. immigration curbs put the spotlight back on Trump’s protectionist bent and the risks it poses for the economy.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza