- The euro dollar exchange rate is 0.05 pct up on Tuesday's closing level at 1.3530.
- The euro pound exchange rate is 0.1 pct lower at 0.8444.
- The euro Australian dollar is 0.07 pct lower at 1.4188.
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"For a moment yesterday the ball was back in the dollar’s court, and the euro was struggling to push the rate beyond 1.35. However, confusion in the US has worked in the single currency’s favour and the euro is dominating once again," says Sasha Nugent at Caxton FX.
EUR-USD fell below 1.35 for most part of yesterday due to some further position adjustments ahead of the US debt ceiling deadline.
"We still see more seesawing in the 1.3450-1.3550 band for today, with EMU CPI data unlikely to impact," says a note from UniCredit Bank.
Inflation data fails to move the euro
Looking at the aforementioned inflation data we note numbers have come in broadly in-line with expectations:
Consumer Price Index - Core (YoY) (Sep) reading came in at 1%, expectations were for 1%.
Consumer Price Index (YoY) (Sep) came in at 1.1%, bang-on in line with expectations.
Support still holds, thus the outlook favours the euro
According to Luc Luyet at MIG Bank the euro is likely to maintain a positive tone on the forex markets:
"EUR/USD weakened yesterday. However, the recent low at 1.3486 (09/10/2013 low) has not been decisively broken and the key support at 1.3462 is intact. An initial resistance now stands at 1.3550 (intraday low). Another resistance is at 1.3607.
"In the longer term, a move towards the resistance at 1.3711 (01/02/2013 high) is expected as long as the support at 1.3462 holds.
"However, the increasing overbought conditions and the other key resistance given by the longterm declining trendline (around 1.4000) should put a cap to the medium-term upside potential."