The Euro slipped back and moved near to the recently struck 1-month trough versus the US Dollar. Now that Monday’s volatility has finally ebbed, risk appetite has improved as has the need for carry trade currencies like the Euro. The recently released data from China which disappointed markets coupled with the growing rift between Iran and Saudi Arabia had spurred the market’s volatility and pushed the Dollar to an 11-week trough against the Japanese Yen.
One currency strategist in London said that the fact that the People’s Bank of China pumped nearly $20 billion in stimulus to stabilize its local financial markets helped to calm market jitters.
As reported at 11:49 am (GMT) in London, the EUR/USD was trading at $1.0776, down 0.51%; the pair has ranged from a low of $1.0764 to $1.0839 in today’s session. The USD/JPY pair traded at 118.9770 Yen, down 0.30%; the pair ranged from 118.8300 Yen to 119.7050 Yen.
Eurozone Inflation Data Weighs Heavily
The latest Eurozone data which showed preliminary inflation figures was disappointing pretty much across the board. Yesterday, Germany’s and Spain’s inflation figures were weaker than anticipated, and Italy and the Eurozone as a whole followed suit in today’s releases. That will put pressure on the European Central Bank to loosen policy even more.