Investing.com - The euro rose to session highs against the dollar, the pound and the yen on Tuesday but gains looked likely to remain limited after weak German inflation data raised concerns over weakening demand in the euro zone.
EUR/USD pulled away from session lows of 1.3359, to hit 1.3429 during European afternoon trade, rising 0.16%.
The pair was likely to find support at 1.3343, Friday’s low and a seven-week low and resistance at 1.3450.
Data released on Tuesday showed that the annual rate of inflation in Germany, the euro zone’s largest economy, slowed to 1.2% in October, the lowest level in more than three years, from 1.4% in September.
The data added to concerns over growing deflationary pressures in the euro area, after the annual rate of inflation across the euro zone slowed to a four year low of 0.7% in October.
The downward trend in euro area inflation prompted the European Central Bank to cut rates to a record low 0.25% on Thursday, sparking a broad selloff in the euro.
Demand for the dollar continued to be underpinned after last week’s strong U.S. jobs report fuelled expectations that the Federal Reserve may start scaling back its USD85 billion-a-month asset purchase program as soon as next month.
The euro rose to one-week highs against sterling, with EUR/GBP advancing 0.68% to 0.8442.
The pound weakened across the board after data showed that the annual rate of inflation in the U.K. slowed to the lowest level in more than a year in October.
The Office of National Statistics said the annual rate of inflation in the U.K. slowed to 2.2% in October, the lowest since September 2012, from 2.7% the previous month. Economists had expected the inflation rate to slow to 2.5%.
The euro also extended gains against the yen, with EUR/JPY climbing 0.69% to 133.85.
EUR/USD pulled away from session lows of 1.3359, to hit 1.3429 during European afternoon trade, rising 0.16%.
The pair was likely to find support at 1.3343, Friday’s low and a seven-week low and resistance at 1.3450.
Data released on Tuesday showed that the annual rate of inflation in Germany, the euro zone’s largest economy, slowed to 1.2% in October, the lowest level in more than three years, from 1.4% in September.
The data added to concerns over growing deflationary pressures in the euro area, after the annual rate of inflation across the euro zone slowed to a four year low of 0.7% in October.
The downward trend in euro area inflation prompted the European Central Bank to cut rates to a record low 0.25% on Thursday, sparking a broad selloff in the euro.
Demand for the dollar continued to be underpinned after last week’s strong U.S. jobs report fuelled expectations that the Federal Reserve may start scaling back its USD85 billion-a-month asset purchase program as soon as next month.
The euro rose to one-week highs against sterling, with EUR/GBP advancing 0.68% to 0.8442.
The pound weakened across the board after data showed that the annual rate of inflation in the U.K. slowed to the lowest level in more than a year in October.
The Office of National Statistics said the annual rate of inflation in the U.K. slowed to 2.2% in October, the lowest since September 2012, from 2.7% the previous month. Economists had expected the inflation rate to slow to 2.5%.
The euro also extended gains against the yen, with EUR/JPY climbing 0.69% to 133.85.