The euro gave back its early gains on Thursday, trading at around 1.1228 after retreating from a daily high of 1.1268. The US Dollar Index bounced back to around 101.54 as the session wore on.
Inflation data in line with forecasts
Eurozone flash HICP for October rose to 4 percent year-on-year, up from 3.8 percent previously and in line with analyst expectations. Core inflation was unchanged at 2.5 percent.
Antje Praefcke at Commerzbank said the figures were in line with forecasts. With the inflation target at 2 percent and the deposit rate at 2.50 percent, she said they clearly made the case for further ECB rate hikes.
Oil slide weighs on the dollar
Analysts at MUFG said a weaker dollar and lower US yields had been encouraged by the sharp fall in oil prices. Brent has dropped by around 10 dollars a barrel since the US mid-term election results were announced.
That decline has eased market concerns over upside inflation risks, MUFG said. Brent’s 200-day moving average, near 93.60 dollars a barrel, is the level traders are watching for support.
Traders look ahead to US Payrolls
US Nonfarm Payrolls data for October is due Friday and is expected to shape Fed rate expectations. Traders are confident of a 25 basis point Fed hike at the December meeting, which would take the target range to 4.00-4.25 percent.
MUFG said the US mid-term outcome could further undermine investor confidence in US AI-related investments. By our market data, EUR/USD stood at 1.1222 as of 13:19 GMT on 5 November.
Related: Euro gains on oil reversal and firmer eurozone factory data
Data: European Central Bank · Swissquote
