Euro Falls As German Import Prices Fall To More Than 5-yr Low

The euro declined against its most major rivals in early European deals on Friday, after data showed that Germany's import prices registered its worst fall in more than five years in January.

The import price index fell 4.4 percent year-on-year at the start of the year, faster than December's 3.7 percent decline. Economists had forecast a 4.6 percent fall for the month.

The latest decline was the sharpest since November 2009, when prices had fallen 5.0 percent.

Traders now focus on German inflation data for February, due later in the day.

Inflation is expected to remain in a deflationary territory in February, with a 0.3 percent fall annually after the 0.4 percent drop last month. The harmonized measure of consumer prices are expected to fall at the stable rate of 0.5 percent in February.

The currency has been already under pressure, as the European Central Bank is starting its quantitative easing program at next week's meeting. The quantitative easing program tends to depreciate currency.

Elsewhere, German lawmakers are expected to approve a four-month extension of Greece's bailout in a parliament vote later today despite irritation among some lawmakers over recent comments by Greek officials. Parliaments in several other European countries must also accept the aid proposals before the current bailout program expires Saturday.

The 19-nation currency declined to a new 3-week low of 133.51 against the yen in early deals and has been steady is subsequent trading. At yesterday's close, the pair was quoted at 133.69.

The euro fell to a 9-day low of 1.0628 against the Swiss franc, pulling away from an early high of 1.0691. If the euro extends slide, 1.00 is seen as its next support level.

The single currency fell back to 1.1196 against the greenback, not far from yesterday's more than 4-week low of 1.1183. Continuation of the euro's downtrend may lead it to a support around the 1.10 zone.

The euro hit 0.7256 against the Sterling, a level unseen since December 2007. The euro may possibly find support around the 0.70 mark.

Looking ahead, the second estimate of U.S. fourth quarter GDP data, pending home sales for January and Reuters/University of Michigan's final consumer sentiment index for February are due in the New York session.