Investing.com - The euro was higher against the dollar on Thursday after data showed that inflation in Germany remained weak last month but the rate of inflation in France ticked higher.
EUR/USD was up 0.15% to 1.2456, holding above last week’s 26-month lows of 1.2356.
Official data showed that the annual rate of inflation in Germany was unchanged at 0.8% in October, but prices actually fell 0.3% from a month earlier.
A separate report showed that the annual rate of inflation in France, the euro area’s second largest economy, rose to 0.5% last month, up from 0.3% in September and ahead of forecasts for 0.4%.
On a month-over-month basis prices were flat.
In Spain, data showed that the consumer price index fell 0.1% in October from a year earlier, continuing a period of price declines. On a monthly basis, consumer prices ticked up 0.5% from 0.2% in September.
The data underlined concerns over persistently low levels of inflation in the euro area. The European Central Bank targets an inflation rate of close to, but just below 2%.
Demand for the dollar continued to be underpinned by the diverging monetary policy outlook between the Federal Reserve and its major peers.
The ECB cut rates to record lows in September and implemented fresh stimulus measures to bolster growth and inflation. In contrast the Fed is expected to raise interest rates sometime next year as the economic recovery in the U.S. continues to deepen.
Elsewhere, the euro was higher against the softer yen, with EUR/JPY up 0.23% to 143.98.
The yen has come under renewed selling pressure this week amid speculation that Japanese Prime Minister Shinzo Abe could call a snap election in December.
Speculation that the prime minister could postpone a proposed sales tax increase, scheduled for October 2015 also weighed.
A win for Abe would indicate continued support for his for his economic and fiscal policies, which call for a weaker yen.