Europe’s Year on Year Producer Price Index for February came out today below expectations at 6.6% from an expected figure of 6.7%. The PPI figure is a measure of the prices received by domestic producers of commodities throughout the stages of processing; a higher than expected figure is a bullish signal for the Euro.
The data did appear to nudge the EURUSD currency pair is a downward direction that it had already picked up. The current level of the single currency against the greenback is at 1.4193 and is on a decline. The EURUSD had reached a new 5 month high at 1.4267 in the mid part of today’s Asian session but has failed to break past the resistance level of 1.4281 – the November 4th peak which is currently seen as a strong psychological point for the market.
The Euro has also retreated against the Japanese Yen after having reached an 11-month high at 120.04 in the early hours of the Asian session, and has so far dropped by a little over 75 pips from this level as it currently trades at 119.26 with a downward momentum. The Japanese Yen has been influenced in recent weeks by the G7 intervention, with the aim of weakening the JPY so as to allow for more competitive exports from Japan and hence boost the Japanese economy which has greatly suffered last month following the natural disasters.