Euro Trades near One-Month Low as Dollar Gains before PMI Data

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Euro Trades near One-Month Low as Dollar Gains before PMI DataThe euro almost hit a one-month low before Monday’s release of inflation statistics in the euro zone that show that it slowed down, raising prospects that the European Central Bank will roll out stimulus measures when it meets this week.

The dollar traded near a two-week peak against the yen before Tuesday’s release of U.S. manufacturing statistics by the Federal Reserve Chair Janet Yellen. The Australian dollar rose 0.5 percent from a four-month peak as analysts predicted the country’s Reserve Bank won’t lower interest rates on Tuesday.

 “If the euro area’s inflation estimate comes in below consensus, it’ll feed speculation of further easing,” Toshiya Yamauchi, a Tokyo-based senior analyst at Ueda Harlow Ltd told Bloomberg. “The euro could drop below $1.37.”

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The euro was trading at $1.3754 by 8.43 a.m. in Tokyo from last week’s close of $1.3752, when it reached an intraday low of $2.3705. The currency has changed slightly against the dollar since Dec. 31. It was trading at 141.52 yen from Friday’s close of 141.40 and is headed for 2.2 percent decline this quarter.

The dollar was trading slightly higher at 102.89 yen from Friday’s close of 102.83, when it touched a high of 102.98, the highest level in two weeks. So far, the dollar has declined 2.3 percent against the yen in 2014. The Aussie dollar was trading at 92.49 U.S. cents, up from a high of 92.95 last week, the highest such level since Nov. 21.

 A Bloomberg survey of economists forecasts that the European Union’s statistics office will say that consumer prices in the euro zone to surge 0.6 percent in March from a year ago.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com