The Single European Currency had mixed day on Wednesday, up against the USD, CAD and GBP, little changed against the AUD but down against the NZD. In early European trade as stock markets tanked, EUR/USD fell to test Tuesday’s low just below 1.2260 but then rallied as stocks recovered, even though it was ultimately unable to hold on to a 1.23 ‘big figure’. Overnight in Asia, the pair is little changed from last night’s close against either the USD or GBP.
In economic news, headline annual inflation in the Eurozone rose to 1.4% in March from a downwardly-revised 1.1% in February, in line with the consensus. The core rate was unchanged at 1.0%, below the consensus, 1.1%. Looking at the main components of euro area inflation in this ‘flash estimate’, food, alcohol & tobacco is expected to have the highest annual rate in March (2.2%, compared with 1.0% in February), followed by energy (2.0%, compared with 2.1% in February), services (1.5%, compared with 1.3% in February) and non-energy industrial goods (0.2%, compared with 0.6% in February).
Separate figures from Eurostat showed the Eurozone unemployment rate was 8.5% in February 2018, down from 8.6% in January 2018 and from 9.5% in February 2017. This is the lowest rate recorded in the euro area since December 2008. The broader EU28 unemployment rate was 7.1% in February 2018, down from 7.2% in January 2018 and from 8.0% in February 2017. This is the lowest rate recorded in the EU28 since September 2008. Among the Member States, the lowest unemployment rates in February 2018 were recorded in the Czech Republic (2.4%), Germany and Malta (both 3.5%) as well as Hungary (3.7% in January 2018). The highest unemployment rates were observed in Greece (20.8% in December 2017) and Spain (16.1%). This morning we’ll get to see the service sector PMI survey. The EUR opens in London this morning at USD1.2275 with GBP/EUR in the mid-1.14’s.