Euro fell to six-week lows against dollar in Europe on Thursday, as expectations the European Central Bank is poised to ease in June overshadowed better-than-expected German growth data.
Germany was once again the main driver of modest growth in the Eurozone as Italy contracted, while France's stagnated. Germany’s growth pace accelerated to 0.8 percent in the first quarter from 0.4 percent, while in France the expansion pace remained unchanged at 0.8 percent.
Growth in the euro-area slowed in the first three months of the year according to preliminary data. The 18-country bloc saw economic growth of 0.2 percent in the first quarter, unchanged from previous three months and missing analyst expectations of 0.4 percent.
Euro fell 0.34 percent against the greenback, pushing the EURUSD pair lower to trade at $1.36595 after opening at $1.36654. The pair so far hit high at $1.36791 and low at $1.36550, according to four-hour time frame.
The euro hit those lows after ECB Vice President Vitor Constancio said the central bank is ready to loosen monetary policy further to prevent the currency bloc from succumbing to an extended period of low inflation.
Separate report released also earlier in the session showed monthly inflation rose 0.2 percent in April, with core inflation - which excludes energy and unprocessed food, - rising by 0.2 percent. Annual Consumer Prices remained unchanged at 0.7 percent – still well below 2 percent ECB target.
Earlier this month, ECB President Mario Draghi signaled that the central bank would likely cut interest rates or take other stimulus measures in June to combat low inflation.
Against the yen, euro lost 0.37 percent, where the EURJPY pair was last seen trading at ÂĄ139.181 after opening at ÂĄ139.231, while hitting its lowest at ÂĄ139.153.
The Japanese economy posted stronger-than-expected first-quarter growth data, with GDP coming at 5.9 percent annualized. However, the strong Japanese growth didn’t help Asian equities as the strong yen is keeping Japanese equities in negative territory and this is the case for most other Asian markets.
Markets will be closely watching the United States, as the world’s largest economy publishes consumer price inflation data for April at 8:30 a.m. ET on Thursday, one day after the government reported wholesale prices rose more than expected in April.
The Empire manufacturing survey for May will be also out at the same time, and will be followed by the Philadelphia Federal Reserve report for May. Other data out include industrial production figures for April.
