Euro Recovers As Eurozone CPI Meets Expectation

The euro bounced off from its early lows against most major currencies in the European session on Friday, after data showed that the Eurozone inflation matched forecast in August.

Data from Eurostat showed that inflation fell to 0.3 percent from 0.4 percent in July, flash report from Eurostat revealed. The rate came in line with economists' expectations.

Inflation has moved further down from the European Central Bank's target of 'below but close to 2 percent'.

Meanwhile, core inflation that excludes prices of energy, food, alcohol and tobacco, rose marginally to 0.9 percent in August from 0.8 percent in July.

At the same time, Eurostat also said that the euro area unemployment rate remained unchanged at a 21-month low in July.The jobless rate came in at 11.5 percent in July, unchanged from June and matched expectations. The number of unemployed totaled 18.409 million compared to 18.405 million in June.

Traders are uninspired by the Eurozone CPI and unemployment data, but attracted for some moves in the ECB policy meeting on September 4 amid talk of potential further easing in the Jackson Hole annual summit.

The euro slipped against the other major currencies earlier after data showed that German retail sales declined unexpectedly in July.

The euro, which ended yesterday's deals at 1.3181 against the U.S. dollar, edged up to 1.3194. This may be compared to an early low of 1.3159. If the euro extends its uptrend, it is likely to find resistance around the 1.32 area.

Moving away from an early multi-week low of 0.7930 against the pound, the euro recovered to 0.7946. The euro may test resistance near the 0.80 region.

Data from Nationwide showed that house prices growth in the U.K. accelerated unexpectedly in August.Nationwide house prices rose 11 percent year-over-year in August following the 10.6 percent growth in July. Economists had expected house prices growth to slow to 10.2 percent.

Against the yen, the euro edged up to 137.07 from an early low of 136.57. At yesterday's close, the euro was trading at 136.69 against the yen.The euro is likely to find resistance around the 135.60 region.

Data from the Ministry of Economy, Trade and Industry showed that industrial production in Japan added 0.2 percent on month in July.That was well shy of forecasts for a gain of 1.0 percent following the 3.4 percent decline in June. On a yearly basis, industrial production fell 0.9 percent - also missing expectations for a fall of 0.1 percent following the 3.1 percent jump in the previous month.

Looking ahead, Canada GDP for June, U.S. personal income and spending data for July and Reuters/University of Michigan's final consumer sentiment for August are due be released in the New York session.