The euro reversed a four-day streak of losses when it advanced on Friday against the dollar after consumer-price inflation in Germany declined at a slower rate than expected.
The euro had earlier touched its lowest point in one month against the dollar as prices fell in Spain and inflation declined in three states in Germany.
“Investors were looking for an even cooler reading of German inflation, and that’s why the euro benefited in a little bit of a relief rally,” Omer Eisner, a Washington-based analyst at Commonwealth Foreign Exchange Inc, told Bloomberg.
The euro was up 0.2 percent at $1.3761 as of 10.18 a.m. in New York after earlier touching $1.3705, its lowest level since February 28. The 18-nation currency also advanced 0.7 percent to 141.36 yen, as the Japanese currency plunged 0.5 percent to 102.72 a dollar.
The Deutsche Bank’s Currency Volatility Index, which is computed based on three-month implied volatility of 9 main currency pairs, fell for the first time since Monday. It was currently at 7.38 percent, down from 7.51 percent on Thursday. The index had earlier touched its lowest point since December 2012 of 7.02 percent.
The dollar was still weak against most peers after Thomson Reuters/University of Michigan final index of U.S. consumer sentiment plunged to 80, from 81.6 in February, the lowest level in four months.
When computed using the uniform European Union method, German inflation fell to 0.9 percent in March, down from 1 percent a year earlier, according to the Federal Statistics Office. Prices rose 0.3 percent from February, which lagged economists’ forecast.
The euro has plunged 1.1 percent against a basket of 10 currencies of developed nations as estimated by Bloomberg Correlation-Weighted Indexes.
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