NEW YORK: A low but stable inflation number for the eurozone gave the euro a boost against the dollar Friday.
Prices in the euro region rose at a 0.8 per cent rate in February, unchanged from the month before, amid worries that the 18-nation economy could stall into a deflationary spiral.
At 2200 GMT the euro stood at $1.3800, compared with $1.3710 late Thursday. During the day’s trading, it reached $1.3825, its highest level since late October.
The euro also advanced to 140.44 yen from 140.05 yen, while the dollar slipped to 101.76 yen from 102.15.
Analysts said the eurozone inflation data reduced the possibility that the European Central Bank would further ease monetary policy at its meeting next week, and that spurred buying in the common currency.
ECB chief Mario Draghi insisted again Thursday that he saw no danger of deflation as there was no “evidence of consumers postponing expenditure plans.”
Even though the inflation rate remained far from the central bank’s target zone of two per cent, he said, “We are clearly not in deflation, which is defined as a self-reinforcing fall in prices that is broad-based across items and across countries.”
The dollar continued to show weakness in the wake of Federal Reserve Chair Janet Yellen’s slightly more sober tone on the economy Thursday. She said in Senate testimony that the Fed’s plan to taper its stimulus remained in place but added that the Fed was closely eying economic data to see if there was more behind recent weak indicators than just severe winter weather.
The British pound also pushed higher against the greenback, to $1.6737 from $1.6688, while the dollar lost against the Swiss franc, buying 0.8797 francs compared with 0.8882 on Thursday.