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Euro regains ground as euro zone inflation stays firm

EUR/USD held near 1.1530 after Eurostat data showed core HICP at 2.5% year over year, while hawkish Fed rhetoric supported the US dollar.

Reported · Written up by our desk · Major Pairs

EUR/USD traded near the 1.1530 area during Friday's American session, consolidating after a strong rally off intraday lows, as resilient euro zone inflation provided support for the euro, according to FXStreet.

Preliminary Eurostat figures showed euro zone HICP rose 2.9% year over year in July, up from 2.8% in June. Core HICP accelerated to 2.5% year over year, above the prior 2.4% reading and economists' forecasts, with headline HICP up 0.2% on the month while core was unchanged.

The report also pointed to mixed labor market signals, with Germany's unemployment rate rising to 6.4% in June from 6.3% and the number of unemployed increasing by 6,000, slightly above expectations.

FXStreet said gains in the euro remained capped as hawkish comments from Dallas Fed President Lorie Logan reinforced support for the US dollar, including her view that monetary policy is not restraining the economy and inflation is not on course to return to the Fed's 2% objective. On the technical side, the pair was around 1.1531, above the 20-period and 100-period SMAs, with RSI near 67 indicating overbought conditions.

Latest closeEUR/USD 1.153 ▲1.3%

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