Euro exchange rates today: EUR in fresh slump, EZ inflation data falls faster than expected
- The euro dollar exchange rate is 0.28 pct in the red at 1.4476.
- The euro pound exchange rate is 0.28 pct lower at 0.8356.
- The euro Australian dollar exchange rate is 0.3 pct lower at 1.4639.
Driving the Euro lower on Monday was the release of some consumer-friendly inflation data.
September's year-on-year inflation read at 1%, analysts had forecasted 1.1%.
The implications here are that the European Central Bank now has a little more leeway when considering pursuing accommodative monetary policy without having to worry about stoking inflation; a Euro-negative scenario.
Also proving Euro traders with the jitters today is news that the Italian premier's office has confirmed that the PDL minister has resigned.
"The dollar has managed to pare back losses against the euro, with the rate back below 1.35 at 1.3488, thanks to political worries in Italy as well as disappointing German retail sales. Chicago PMI figures due this afternoon could allow the dollar to take this further," says Sasha Nugent at Caxton FX.
Outlook for the euro today
Nugent expects the rate to remain below 1.35 in today’s session with the EUR/USD heading towards 1.3450.
Geoffrey Yu at UBS however believes the euro is likely to stay on the front foot:
"Support is at 1.3462, a break below which would extend the correction to 1.3392 Resistance is at 1.3569, a break above which would open the way to major resistance at 1.3711."
Luc Luyet at MIG Bank is forecasting the Euro to bounce back against the US dollar:
"EUR/USD's recent decline is viewed only as a short-term corrective phase as long as the support at 1.3452 (previous resistance, see also the 50% retracement) holds. An initial resistance can be found at 1.3565 (27/09/2013 high). Another resistance stands at 1.3569."
Also adding weight to the Euro is the general sentiment on global financial markets.
Stocks are being sold off and this is weighing on the shared currency.