Home / Stock Market News / Daily Currencies Ratings / Euro slips to two-week lows as weak data weigh

Euro slips to two-week lows as weak data weigh

The euro huddled at a two-week low against the dollar on Thursday as weak euro zone data pulled the single currency below a key market level, while the pound stabilized as British policymakers seek consensus on how to exit the European Union.

“Euro zone data has been quite disappointing and that is prompting the euro to underperform the struggling dollar in the opening weeks of the year,” said Alvin Tan, a currency strategist at Societe Generale in London.

The euro <EUR=EBS> held at $1.1398, broadly flat against the dollar. It briefly hit a low of $1.1371 in the Asian session, its lowest since Jan. 4. The single currency has fallen 1.7 percent over the last week as weak data has weighed.

Data this week showed the German economy grew by 1.5 percent in 2018, the weakest rate of expansion in five years, while euro zone inflation data earlier showed price pressures receding further from the central bank’s target, complicating the situation for the European Central Bank which currently expects to raise interest rates later this year.

The euro’s weakness comes at a time when the dollar itself has struggled to gain momentum after an unlikely five rise last year with market watchers growing more pessimistic about the greenback’s outlook.

On Jan. 10, the dollar <.DXY> almost fell below its 200-day moving average when the index touched a three-month low of 95.029. Since then it has rebounded but is still down 0.1 percent so far this month.

Long dollar, or buying and holding the dollar, was the most-crowded trade in Bank of America Merrill Lynch’s monthly fund manager survey for the second straight month in January.

“We think the dollar is actually subject to downside risk because the market is still very long the currency and at the same time the dollar is likely to lose its rate advantage due to the Fed being closer to a pause in its tightening,” said Manuel Oliveri, currency strategist at Credit Agricole in London.

The New Zealand dollar led losers as weak economic data was compounded by general lack of risk appetite across the board. The kiwi fell 0.7 percent to $0.6732.

Renewed worries about the damage a Sino-U.S. trade dispute could do to global growth had investors fleeing risk assets.

The Japanese yen, considered a safe-haven currency by investors, gained 0.3 percent and last changed hands at 108.78 yen per dollar.

Other commodity currencies were also hit, indicating a diminished appetite for risk. The Norwegian crown fell 0.3 percent against the dollar and the Australian dollar edged lower.

Analysts pointed to changing expectations for New Zealand and Australian central bank policy.

“There is more of an expectation that the Reserve Bank of New Zealand could be cutting interest rates at some point,” said Jane Foley, senior currency strategist at Rabobank.

“In Australia, there is more attention to the Reserve Bank of Australia’s outlook and there is concern about a slowdown in Chinese growth.”

Britain’s pound was broadly flat at $1.2872, as Prime Minister Theresa May searched for a last-minute exit deal to break the impasse over how to quit the European Union. There was little sign of compromise, however.
Source: Reuters (Reporting by Ritvik Carvalho, additional reporting by Dhara Ranasinghe and Saikat Chatterjee)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping