Slowing inflation hurts euro

Slowing inflation hurts euro

Story link: Slowing inflation hurts euro

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The US dollar and the Japanese yen both made gains against the euro on Friday after the shared currency was hurt by new data on inflation and unemployment.

Eurozone inflation was up just 1.1 percent in January, while the unemployment rate in the region rose to 8 percent, its highest in more than two years.

Gains for the US dollar came even though the Commerce Department said that the US gross domestic product contracted at an annual rate of 3.8 percent in the fourth quarter.

The good news was that the contraction was less than had been anticipated.

Meanwhile, the pound saw gains on new numbers showing that mortgage approvals in the UK were up to 31,000 in December from 27,000 in November against an expected decline.

The pound’s advance came after initial declines on the news that consumer confidence in the UK has fallen to its lowest level since 1974.

At shortly before noon in New York the dollar traded at $1.2814 to the euro while the yen was at ¥115.1269 to the euro and at ¥89.845 to the greenback.

The pound traded at 89.9p to the euro while it took $1.4413 to buy a pound.

The yen, helped by predictions of a retreat from carry trades financed by the low-yielding Japanese currency, also rose to ¥57.1951 to the Australian dollar and to ¥8.7969 to the South African rand.