Euro gains on economic data release


The Euro gained ground against the US Dollar after the release of firm, but expected, Euro-zone inflation data. January Euro-zone CPI rose to an expected 2.4 pct annual rate, this was the 12th month in a row that the figure has been above the ECB’s 2pct target level for inflation. This plus industrial, consumer, and economic confidence all increasing over the past month and both Italian and French producer prices increasing more quickly than anticipated in January and the German ILO unemployment rate falling to 8.8% from 9.1% in December have prompted currency traders to push the Euro up to 1.1895 although it has backed off to 1.1870 against the US Dollar. A move towards 1.1915 to flush out weak dollar bulls is a possibility if the US data creates a touch of volatility. Forex traders would be looking for a move below 1.1830 to signal a test of 1.1780, a level last seen in late December 2005.