Monday, March 20, 2023
HomecurrenciesEuro set for further pain after it hits 10-week low

Euro set for further pain after it hits 10-week low

As the plunged to a ten-week low on Monday following weak euro zone inflation data and amid general risk-off sentiment, analysts told CNBC the single currency could fall further.

The euro traded at $1.3477 early Monday in Asia, its lowest level since October, following a break of major support at $1.3506. Against the yen, it hit a two-month low of 137.38 yen.

(Read more: Deflation worries back as euro zone inflation falls again)

Investors were still reacting to Friday's weaker-than-expected inflation data showing a 0.7 percent on-year rise versus expectations for a 0.9 percent rise, the second consecutive month that the index surprised to the downside.

Lower energy prices dragged the overall figure lower, although the core consumer price index (CPI) – which excludes food and energy prices – ticked up to 0.8 percent, above the 0.7 percent forecast.

Emmanuel Ng, currency economist at Singaporean bank OCBC, said the contrasting perceptions of the U.S. Federal Reserve, which has started moving towards a more hawkish standpoint over the past year, and the more dovish ECB, would lead to more falls for the euro.

"We grow increasingly negative on the pair's prospects and if the $1.35 level is not re-taken, a drift towards the 200-day moving average ($1.3379) cannot be discounted," said Ng.


Most Popular