RTTN:Euro Pares Asian Session Gains Against Majors
The euro erased its Asian session advance against other major currencies in early European deals Thursday as market's appetite for risk faded in the session.
Italy's solid bond auctions yesterday despite the nation's election stalemate helped the European shared currency advance overnight and the ECB President Mario Draghi's pledge to stick on the stimulus boosted the risk-sentiment further.
Draghi signaled the central bank has no intention of tightening monetary policy anytime soon, as he anticipates inflation to come significantly below the bank's target this year.
Final data from Eurostat showed that inflation in the euro area, as per the harmonized index of consumer prices, weakened in January as estimated earlier.
The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2 percent on an annual basis in January, after rising 2.2 percent in December. The latest figure matched preliminary estimates.
On a monthly basis, the the overall HICP for the euro area decreased 1 percent in January, the agency said.
German unemployment declined unexpectedly by 3,000 in February from the prior month, the Federal Labor Agency said today. It was forecast to remain unchanged in February, following a revised decline of 14,000 in January.
The jobless rate held steady at 6.9 percent in February, above the consensus forecast to 6.8 percent.
Meanwhile the Federal Statistical Office data showed that the jobless rate in Germany remained unchanged at 5.3 percent on an adjusted basis in January.
On the other hand, the unadjusted jobless rate rose to 5.9 percent in January from 5.3 percent in December.
The euro reached 0.8636 against the pound around 5:50 am ET, down almost 0.4 percent from Wednesday's close of 0.8669.
The common currency slipped back to below the key 1.31 level against the US dollar around this time from Asian session's 3-day high of 1.3163.
The single currency slipped to 120.63 against the yen around 5:40 am ET, down significantly from Asian session's multi-day high of 121.85.
The yen weakened in the Asian session as the Japanese government nominated Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, to be the next Bank of Japan governor.
Also, official data showed that Japan's industrial production grew 1 percent in January, expanding for the second straight month, adding to evidence that the export-reliant economy is pulling out of a mild recession.
The euro reached as low as 1.2190 against the Swiss franc before recovering a few pips around 4:15 am ET. The euro-franc pair challenged yesterday's peak in the Asian session, rising as much as 1.2227.
Switzerland's gross domestic product rose 0.2 percent quarter-on-quarter in the fourth quarter, the latest figures from the State Secretariat for Economic Affairs (SECO) showed today.
This was weaker than third quarter's 0.6 percent expansion. The outcome, however, was better than economists' forecast for a flat reading.
Year-on-year, GDP rose 1.4 percent compared to expectations for a 0.9 percent growth. This followed a revised 1.2 percent annual rate of expansion in the third quarter.
