Euro in Lazy Trading
The Euro posted a modest retracement following yesterday’s dive, settling above 1.2710 and ranging for during late Asian and early European trade. The decline in EUR/USD came in anticipation of the US trade balance, which reported at -63.8, only modestly better than the month prior. The pair has since rallied off the 1.2674 low mid-day Wednesday to as high as 1.2733. European economic data consisted of German and French CPI, which were slightly below expectations in both countries and helped to ease some of the recent inflation concerns. EU Harmonized German CPI for June showed a 0.1% month over month increase with an annual rate of 2.0%, in line with ECB targets and below the 2.1% mark for May. French EU Harmonized CPI for June later showed no change from May, while the yearly rate declined from 2.4% to 2.2%. Although further ECB rate hikes are expected before the end of the year, the new data gives the central bank something to ponder as it considers the timing on the increases. Policymakers have noted that global monetary policy has been very accommodative for the past few years and notes that this may soon come to an end. As of 9:00GMT EUR/USD traded at 1.2721, up from Wednesday’s New York close at 1.2700.
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