(MENAFN– ecpulse)
Euro was battered in European trades Thursday, adding to losses after previously inching off a one-year low versus the dollar, as data showing euro-area confidence more than economists in August backed European Central Bank’s President Mario Draghi warning that more stimulus may be needed soon.
Eurozone economic confidence weakened more-than-expected in August with the economic confidence index fell to 100.6 in August from 102.1 in July, while business confidence remained broadly unchanged in August. The indicator came in at 0.16 versus 0.17 in July.
Euro reversed gains against the U.S. dollar, pushing the EURUSD pair to the downside to trade at $1.31880 after starting the day at $1.31921. The pair so far hit intraday high at $1.32197 and low at $1.31829.
Technically, the pair is expected to face strong resistance at $1.3195 and support at $1.3168. Stabilizing above 1.3230 weakens the expectations of a downside move especially if the pair failed to stabilize above the referred to level with a daily closing.
Other data revealed that the number of Germans without jobs increased in August while unemployment rate remained steady near record lows, suggesting the labor market in Europe`s largest economy remains healthy despite a recent setback in economic activity.
The markets looked to the German inflation data due later in the session, which foreshadow the closely watched euro zone inflation figures due Friday.
ECB Stimulus Outlook Cools
Euro rebounded from a 13-month low in the previous session after reports suggesting the European Central Bank might not introduce more stimuli next week.
An unnamed ECB official told Reuters yesterday the bank is unlikely to announce on quantitative easing (QE) at its meeting next week unless August inflation figures due on Friday signal the 18-nation bloc is moving closer toward deflation.
Euro has been struggling the past few days on expectations of soft inflation data and more monetary easing. Data due on Friday may show annual rate dipping to 0.3 percent in August from 0.4 percent.
Germany`s Finance Minister Wolfgang Schaeuble said in a newspaper interview Wednesday that European Central Bank chief Mario Draghi had been "over-interpreted" after he said he would use all the available instruments" should inflation weaken more.
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