Euro Retreats Following Eurozone Consumer Inflation

The euro retreated from its early highs against its major counterparts in the European session on Friday, after the release of inflation data from the euro area, which came in line with the flash estimate in October.

Final figures from Eurostat showed that Eurozone inflation accelerated in October at the fastest pace in almost six years, as estimated initially.

The consumer price index rose 2.2 percent year-on-year after a 2.1 percent increase in September. Inflation was the highest since December 2012.

Inflation again exceeded the European Central Bank's target of "below, but close to 2 percent".

Core inflation, which excludes prices of volatile items such as energy, food, and alcohol and tobacco, rose to 1.1 percent from 0.9 percent in September. The flash estimates released on October 31 were thus confirmed.

Speaking at the European Banking Congress in Frankfurt, European Central Bank President Mario Draghi reaffirmed that asset purchases would come to an end in December, subject to incoming economic data.

But uncertainties surrounding the medium-term outlook have intensified, he cautioned.

"When the latest round of projections is available at our next meeting in December, we will be better placed to make a full assessment of the risks to growth and inflation," he said.

European shares were higher despite growing uncertainty surrounding Brexit.

The currency traded mixed against its major counterparts in the Asian session. While it rose against the greenback and the franc, it fell against the yen. Against the pound, it held steady.

The euro dropped to 0.8832 against the pound, after rising to 0.8880 at 4:15 am ET. The next possible support for the euro is seen around the 0.86 level.

Having advanced to a weekly high of 1.1368 against the greenback at 3:15 am ET, the euro reversed direction and eased to 1.1325. The euro is likely to find support around the 1.12 level.

The European currency retreated slightly to 1.1410 against the Swiss franc, from a weekly high of 1.1433 hit at 3:30 am ET. The euro is poised to find support around the 1.13 level.

The euro reversed from an early high of 128.78 against the yen, edging down to 128.28. Next likely key support for the euro is seen around the 126.00 level.

The single currency weakened to 1.4908 against the loonie, after having advanced to 1.4951 at 4:45 am ET. If the euro weakens further, 1.47 is possibly seen as its next support level.

Looking ahead, Deutsche Bundesbank President Jens Weidmann will deliver a speech at the Frankfurt European Banking Congress at 8:00 am ET.

In the New York session, Canada manufacturing sales for September and U.S. industrial production for October are set for release.