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Euro Holds Ground After Inflation Slows

November 15, 2019 at 12:15 by Vladimir Vyun

Coins of eurocents on a €500 noteThe euro rose against other most-traded currencies today even after a report confirmed that eurozone inflation slowed last month. It looks like the market sentiment is recovering as riskier currencies are gaining upward momentum, while safer ones seem to be under pressure.

Eurostat reported that the eurozone annual inflation rate was at 0.7% in October, down from 0.8% in September, according to the revised estimate. The reading was unchanged from the preliminary estimate and was in line with market expectations. The core inflation rate (excluding food, energy, alcohol, and tobacco) was at 1.1% according to the final reading, up from 1.0% in the prior month. It was also unchanged from the preliminary report and matched expectations.

Released separately, the seasonally adjusted eurozone trade balance logged a surplus of €18.3 billion in September, down from €19.7 billion logged in August (revised down from €20.3 billion). The actual figure was slightly below the consensus forecast of an €18.7 billion surplus.

Istat reported that the seasonally adjusted Italian trade balance surplus widened to €2.78 billion in September, up from a surplus of €2.59 billion posted in the preceding month. Nevertheless, the actual value failed to meet market expectations of €3.54 billion.

Yesterday, Destatis reported that German gross domestic product rose by 0.1% in the third quarter of 2019 from the previous three months. That was a surprise to market participants as they were expecting the same 0.1% decrease as in the second quarter. The growth, however small, allowed the biggest economy of the eurozone to avoid a technical recession. An economy is considered to be in recession if it demonstrates a decline for two quarters in a row.

EUR/USD gained from 1.1021 to 1.1028 as of 12:14 GMT today. EUR/GBP edged up from 0.8554 to 0.8563. EUR/CHF advanced from 1.0887 to 1.0917.

If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

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