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Euro reverses fall, dollar drops ahead of euro zone price data

Euro reverses fall, dollar drops ahead of euro zone price data

FILE PHOTO: A view of an entrance of Sweden's central bank in Stockholm, Sweden, August 12, 2016. REUTERS/Violette Goarant

(Updates prices, adds comment)

By Hannah Lang

WASHINGTON : The euro recovered on Thursday from a two-week low against the dollar, which sputtered after fresh inflation data showed U.S. consumer spending rose less than expected in May.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, gained 0.2 per cent last month, the Commerce Department said on Thursday, falling short of the 0.4 per cent economists had expected.

The dollar, which had been buoyed by safe-haven flows against the euro, last fell 0.305 per cent to 104.720.

"The dollar rally remains largely intact, given rising worries about a global recession, but today, we saw the dollar gave back some ground after today's data did nothing to allay concerns about the U.S. economy lurching towards a recession over the coming year," said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

The euro was last up 0.33 per cent at $1.0473, reversing a decline sparked by increasing recession jitters in the euro zone and the energy crisis stoked by the war in Ukraine.

The European Central Bank is expected to raise interest rates in July for the first time in a decade to try to cool accelerating inflation, although economists are divided on the magnitude of any hike.

Markets will now look to euro zone inflation figures due on Friday to get a better sense of how aggressive the ECB might be in hiking rates.

"If you do get a firm (consumer price index) print in tomorrow, there is a chance that the market might price in increased odds of a 50-basis point hike in the July meeting, and that could be enough for the euro to bounce somewhat," said Bipan Rai, North America head of FX strategy at CIBC Capital Markets.

Fresh euro zone data showed French inflation climbed to a record high of 6.5 per cent in June, while Greece cut its growth forecast to 3.2 per cent this year from 3.8 per cent.

Euro zone unemployment fell to a new record low in May as the economy continued to rebound from the COVID-19 pandemic, even if inflation exacerbated by Russia's invasion of Ukraine is expected to dampen growth.

The dollar also traded just below a fresh 24-year peak of 137 Japanese yen touched on Wednesday. The gap between a hawkish Federal Reserve and a dovish Bank of Japan continues to weigh heavily on the Japanese currency, which was last trading at 135.59 yen per dollar .

The yen is down 15 per cent against the dollar for the first six months of 2022, the worst first-half of year performance for the currency since 2013.

In cryptocurrencies, bitcoin dipped back below the $20,000 milestone level on persistent market ructions. It was also hurt by the U.S. Securities and Exchange Commission rejecting a proposal to list a spot bitcoin exchange-traded fund by digital asset manager Grayscale. Bitcoin last fell 6.28 per cent to $18,922.55.

The cryptocurrency is down 58 per cent in the first six months of 2022, its worst first-half of year showing ever.


Currency bid prices at 3:15PM (1915 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index 104.7300 105.0600 -0.31 per cent 9.478 per cent +105.5400 +104.6400

Euro/Dollar $1.0475 $1.0443 +0.31 per cent -7.86 per cent +$1.0490 +$1.0381

Dollar/Yen 135.5800 136.6000 -0.74 per cent +17.78 per cent +136.8000 +135.5600

Euro/Yen 142.02 142.61 -0.41 per cent +8.98 per cent +142.8600 +141.3800

Dollar/Swiss 0.9541 0.9548 -0.13 per cent +4.54 per cent +0.9605 +0.9531

Sterling/Dollar $1.2172 $1.2125 +0.48 per cent -9.92 per cent +$1.2188 +$1.2093

Dollar/Canadian 1.2882 1.2895 -0.10 per cent +1.89 per cent +1.2933 +1.2861

Aussie/Dollar $0.6896 $0.6880 +0.26 per cent -5.10 per cent +$0.6919 +$0.6854

Euro/Swiss 0.9994 0.9971 +0.23 per cent -3.62 per cent +1.0013 +0.9945

Euro/Sterling 0.8602 0.8614 -0.14 per cent +2.40 per cent +0.8620 +0.8551

NZ $0.6242 $0.6224 +0.30 per cent -8.80 per cent +$0.6254 +$0.6198


Dollar/Norway 9.8585 9.8900 -0.50 per cent +11.70 per cent +9.9625 +9.8320

Euro/Norway 10.3294 10.3216 +0.08 per cent +3.16 per cent +10.3736 +10.3091

Dollar/Sweden 10.2391 10.2261 +0.38 per cent +13.54 per cent +10.3452 +10.2001

Euro/Sweden 10.7256 10.6849 +0.38 per cent +4.80 per cent +10.7431 +10.6717

Source: Reuters


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