The Euro remained under pressure against the US Dollar despite the release of weaker-than-forecast US consumer confidence data which has increased concerns that the world’s largest economy is slowing.
The Euro weakened earlier in the session after the European Commission cut its inflation forecast for the year from 1.5% to 1%, increasing speculation that the European Central Bank could introduce monetary stimulus measures in an attempt to stave off the threat of deflation in the Eurozone.
Early in the session the currency found support after data showed that the German economy expanded by 0.4% in the fourth quarter of the year and expanded by 1.3% on a yearly basis due to strong overseas demand for German exports.
The US Dollar softened against most major peers after data showed that consumer confidence dropped this month. The currency remained supported however by safe haven demand after a sharp decline of the Chinese Yuan spooked the markets.
The currency of the world’s second largest economy made its sharpest decline in three years amid speculation that the country’s central bank had intervened to add volatility to the currency ahead of possible economic reforms.
According to the Conference Board’s consumer confidence index, confidence fell to 78.1 this month, down from the previous month’s figure of 79.4. Economists had been expecting the figure to improve to 80.0. Another separate report showed that US home prices increased at a slower place in the 12 months ending in December. The S&P/Case-Shiller index of property prices in 20 cities climbed 13.4% from December 2012 after a 13.7% increase in the year ended in November.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3741 ,
Euro,,British Pound,0.8230 ,
Euro,,Australian Dollar,1.5229 ,
Euro,,Canadian Dollar,1.5219 ,