Deflation Fears sees EUR/USD Remain Down at 1.3485

The euro licked its wounds near a ten-week low against the dollar on Monday after soft euro zone inflation data rekindled speculation the European Central Bank may ease policy to stave off deflation.

Worries about capital flight from emerging economies also kept investors at arms length from risk assets, underpinning the yen over growth-sensitive, high-yielding currencies.

The euro traded at $1.3489 in early Monday trade, not far from Friday’s low of $1.3479, which was its lowest level since late November.


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