Eurozone Factory Prices Can’t Keep Euro Down

Euro is gaining ground against the US dollar and the UK pound today, even with the latest producer prices data. Even with the eurozone struggling, and stocks losing ground today, the 17-nation currency continues to forge ahead.

The latest producer prices data out of the eurozone paint a disappointing picture. Instead of decreasing by only 0.2 per cent, as forecasted, prices dropped by 0.5 per cent in October. The year over year drop for October was 1.4 per cent. And inflation in the eurozone remains well below the ECB’s preferred target.

However, even though there are murmurs that the ECB might be considering negative deposit rates, many analysts expect policymakers to keep interest rates steady after meeting later this week.

Even with the evidence that a eurozone recovery continues at a sluggish pace, the euro is doing well against some of its major rivals on the Forex market. Euro is higher against the US dollar and the UK pound right now, even with the volatility in the markets and the fact that safe haven demand has given a boost to the Japanese yen.

At 16:36 GMT EUR/USD is up to 1.3598 from the open at 1.3540. EUR/GBP is up to 0.8282 from the open at 0.8280. EUR/JPY is down to 139.1450 from the open at 139.4050.

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