The Euro tumbled to its lowest level in five months against the Canadian Dollar on Friday as weak data out of the Eurozone and inflation data out of Canada weakened the single currency.
The 18-member single currency was under already under pressure as economists continued to raise their bets that the European Central Bank will introduce new monetary stimulus measures at next month’s monetary policy meeting.
Data released earlier in the session supported those bets as business confidence in Germany fell more than expected in May. The Ifo institutes German business confidence index fell to 110.4, down from the 111.2 recorded in April. Economists had been forecasting a fall to 110.9.
Also weighing on demand for the Euro was weaker than expected retail sales data out of Italy.
The Canadian Dollar meanwhile found support after Canada’s inflation rate increased in April to the reach the Canadian Central Banks target for the first time in two years.
According to Statistics Canada, the nation’s consumer price index increased 2% in April from the previous year and was better than the 1.5% recorded in March as energy prices soared by 8.4%.
Consumer price inflation in Canada, including the eight most volatile items, rose 0.3% in April, as markets had anticipated, after a 0.6% gain the previous month.
“Headline print at 2% is not at all surprising. The market was expecting it, and the numbers by and large were bang on the screws,” said the managing director of foreign exchange at National Bank of Canada in a phone interview with Bloomberg.
Euro Exchange Rate News:
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