Data Drives Euro Down

Ahead of a report likely to confirm that inflation in the Euro region was the slowest in three years, the Euro dropped near to a six-week low.

 

The Euro slid on speculation that the Euro area's annual inflation rate has dipped to 1.2% in April, the lowest level since February 2010, down from 1.7% in March.

Today the European Union's statistics office in Luxembourg is forecast to confirm the expectations.

 

Furthermore, the European Central Bank (ECB) is set to ease policy after data had shown that the region's economy has extended its recession to a record sixth quarter.

This puts more pressure on the region's leaders to spur growth.

Data released yesterday had shown that Gross domestic product (GDP) in the Euro area had contracted 0.2% last quarter. German's economy had grown by 0.1%, well below the 0.3% most economists had forecast.

Under the circumstances I expect the Euro to continue its downward trend.

The Euro was lower by 0.1% at $1.2874 and dropped 0.2% to 131.56 Yen. The Dollar remained virtually unchanged at 102.18 Yen.

The Dollar Index (DXY) was earlier just 0.4% away from its highest level since July at 83.794.

 

Data is also expected out from the U.S., government today that could show that initial jobless claims have probably risen by 7,000 to 330,000 for the week ended May 11.

The Yen had advanced following reports that showed that Japan's economy had expanded more than expected.

This, despite a report that showed that Japanese investors were net buyers of foreign bonds for the week ended May 10th.

A separate report showed that Japan's economy had expanded by 0.9% in the first quarter, above a forecast 0.7% rise.