The Euro remained within striking distance of the recently struck 1-month trough versus the U.S. Dollar in lackluster Asian trade as investors await the later release of key inflation data which could dictate the policy direction of the European Central Bank. Last week, it was shown that inflation in Germany had slowed unexpectedly during the month suggesting that the reading could influence the Eurozone’s overall figures and leave deflation at below the 1% level yet again.
As reported at 10:48 a.m. (JST) in Tokyo, the EUR/USD pair traded at $1.3747, not far from Friday’s low of $1.3704. Against the Japanese Yen, the common currency struck a 1-week peak at 141.74 Yen; the USD/JPY pair was trading at 102.87 Yen, very close to last Friday’s high of 102.98 Yen.
China PMI Ahead
The Japanese currency remains on the defensive as investors await further signs of China’s economic slowdown and the strong possibility then that the Chinese central bank will ease further. Analysts say that tomorrow’ release of PMI data will likely be the deciding factor; a consensus of analysts is predicting another decline, this time to below the 50.0 threshold which demarcates expansion from contraction. In a client note, analysts at Nomura securities say that that will clearly highlight that growth momentum in China is fading.