Forex: EUR/USD recovers from yesterday’s losses

on Jul 10, 2013
Listen Wednesday July 10th:_ The euro has been firming against the US dollar in trading so far today, seeking to recover some of the ground lost yesterday and with the pair at a current intraday high of 1.2810.

Germany’s CPI for June on annual and monthly bases was announced earlier today, showing a second consecutive month’s rise, by 1.8 percent y/y as against May’s 1.5 percent and in line with analysts’ expectations. Month-on-month, the CPI rose by 0.1 percent in June, also matching the forecasts.
The harmonised index of consumer prices (HICP) for Germany rose by 1.9 percent in June y/y, from 1.6 percent rise in the prior period. Month-on-month, the index was up by 0.1 percent in June.

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During yesterday’s European trading the EUR/USD fell to a three-month low at 1.2775, following the news that the International Monetary Fund had lowered its forecast for the World Economic Outlook. According to the IMF’s latest view, the global economy will grow 3.1 percent this year, down from its April’s projection of 3.3 percent growth.
The IMF also predicted that the Eurozone economy was likely to contract 0.6 percent this year before returning to weak growth of 0.9 percent in 2014. The 17-country region recorded six straight quarters of economic contraction through the first quarter of 2013. The IMF said that the Eurozone suffered from “low demand, depressed confidence, and weak balance sheets [which] interacted to exacerbate the effects on growth and the impact of tight fiscal and financial conditions”.