Forex - Euro lower after weak euro zone inflation data

Shutterstock photo - - The euro moved lower against the dollar and the other major currencies on Wednesday after weak euro zone inflation data added to pressure on the European Central Bank to step up stimulus measures.

EUR/USD was down 0.45% to 1.0585, re-approaching Monday's seven-month trough of 1.0552, from around 1.0622 ahead of the data.

Eurostat said the annual rate of inflation in the euro zone rose just 0.1% in November, below forecasts of 0.2% and unchanged from the previous month.

Core inflation, which excludes energy, food and tobacco, rose just 0.9%, slowing from 1.1% in October, indicating that inflationary pressures in the region are weakening.

The data added to the view that the ECB could announce fresh measures to bolster price growth at its meeting on Thursday. At its October meeting the ECB indicated that more stimulus was a possibility.

Many analysts expect the ECB to cut some deposit rates deeper below zero and expand the bond-buying program that it started in March.

The euro was also weaker against the yen and the pound, with EUR/JPY down 0.2% to 130.38 from 130.81 earlier and EUR/GBP sliding 0.26% to 0.7031.

Sterling erased losses against the euro after falling earlier following data showing that output in the U.K. construction sector expanded at the slowest rate in seven months in November.

The dollar moved higher against the other major currencies, boosted by the weaker euro and as expectations for higher U.S. interest rates continued to underpin investor demand.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, rose 0.26% to 100.14, not far from Monday's highs of 100.36, the most since mid-April.

The greenback had eased after the Institute for Supply Management reported Tuesday that the U.S. manufacturing sector contracted last month, slowing to the weakest level since June 2009.

The weak data was seen as unlikely to prompt the Federal Reserve to delay hiking rates next month, but sparked fears that further monetary tightening could hamper the U.S. economic recovery.

Investors were looking ahead to Friday's U.S. jobs report for November for fresh indications on prospects for a December rate hike. The U.S. was to release data on private sector jobs growth later in the day. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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