The euro dropped versus the dollar after posting its biggest one-day gain in a month following the release of new eurozone inflation statistics.
On Wednesday, the euro rose by 0.93% against the dollar, the highest daily rise it has experienced in a month. This uptick was propelled by higher-than-expected German inflation figures for February. These data intensified the expectation that the ECB would need to lift rates, due to similar unexpectedly robust results from France and Spain.
It was 0.53% smaller at $1.0618, after the European Union’s statistics office said inflation in the eurozone rose to 8.6% in February. The inflation rate exceeded expectations. According to the February estimate, the surveyed economists and experts were expecting 8.3%.
Elsewhere, the yen fell 0.4% to $136.72. At the same time, the Australian and New Zealand dollars and the Chinese yuan were little changed after a strong positive on Wednesday, supported by upbeat Chinese manufacturing data.
The Australian dollar was last 0.45%, softer at $0.6729. The New Zealand dollar rose 1.24% on Wednesday and was down 0.7% to $0.6214 on Thursday.
The Chinese yuan retreated to $6.9125 on Wednesday after its biggest gain in 2023.
Investors are looking ahead to China’s People’s Congress meeting, looking for guidance on policy support for a post-COVID resumption. Today’s release of PMI data for China in February has been a positive development for the prices of minerals and the currencies of nations that export them. If the meeting sends a positive message, there could be a significant increase in the value of the yuan and other currencies, such as the Australian and New Zealand dollars.
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