Home Euro-zone back to deflation with -0.2% – EUR/USD falls
Forex News Today: Daily Trading News

Euro-zone back to deflation with -0.2% – EUR/USD falls

Expectations were low and reality even worse:  prices dropped 0.2% in the euro-zone in February according to the preliminary release. In addition, there is no comfort in the core number: it fell from 1% to 0.7%,  below 0.9% expected. This certainly adds pressure on Mario Draghi’s shoulders.

EUR/USD extends its falls and dips below 1.09. The low so far is only 1.0898. Support awaits at 1.0850  followed by 1.0770 and 1.0710. Resistance is at 1.0960.

The euro-zone was expected to report no change in  prices, year over year in February. This is down from the final read of 0.3% for January (downgraded from 0.4% originally reported). Core inflation was expected to stand at 0.9% after 1% beforehand The figures feed into the ECB decision on March 10th.

EUR/USD was trading lower towards the release,  around 1.0920, after being rejected at 1.0960.

On Friday, we learned that Germany fell back to deflation, with the preliminary HICP read standing at -0.2%. Also Spain’s figure fell short of expectations.

Also in Europe, the elections in Ireland resulted in a hung parliament, adding more uncertainty to Spain’s hung one. The G-20 summit resulted in worries about a Brexit but no real practical decisions.

More:  Time To Sell EUR/USD? – SocGen

EURUSD falls February 29 2016 deflation

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.