Dollar falls on euro zone data

 

dollar, world, globe, moneyThe Australian dollar is lower after a bout of disappointing data from the euro zone caused a selloff in most currencies.

At 0700 AEDT on Friday, the local unit was trading at 94.54 US cents, down from 94.92 cents on Thursday.

The unemployment rate across the euro zone stayed at 12.2 per cent in September, after the August figure was revised up from 12 per cent to 12.2 per cent.

Inflation for the euro zone fell to a four-year low of 0.7 in October.

Bank of New Zealand currency strategist Mike Jones said the data sparked a selloff in the euro, which saw the US dollar rise against most currencies.

“The Aussie was essentially caught in the crossfire and it was dragged lower,” he said.

“It was nothing really to do with the Aussie dollar. It was a general bout of euro selling which kick-started the trend for a stronger greenback.”

Jones said the figures raised speculation that the European Central Bank (ECB) will continue with its economic stimulus programs.

“It was a perfect storm for the euro with unemployment at a record high and a four-year low in inflation, which will bolster further hope of ECB easing.”

Jones said markets now would focus on the release of official Chinese manufacturing figures for October, due out on Friday.

He expects the Australian dollar to trade in a range between 94.45 and 94.80 US cents.

AAP

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