Euro falls below 1.18 against dollar for first time in five months

2018-05-16 17:41:03 GMT (
Euro falls below 1.18 against dollar for first time in five months

Euro fell in American trade to December 18 lows against the dollar, following earlier data from the euro zone and the US, the world's largest economy. 


As of 03:07 GMT, EUR/USD fell 0.44% to 1.1786 from the opening of 1.1838, with an intraday high at 1.1854, and a five-month low at 1.1764. 


Earlier German data showed the final reading for consumer prices unchanged in April as expected, compared to a 0.4% rise in March, while the same index for the whole zone rose 1.2% as expected, down from 1.3% in March, as core prices rose 0.7% y/y, down from 1%. 


European Council President Donald Tusk called for European unity in the trade dispute with the US, asserting that unity is the sole source of strength in this dispute as Europe seeks permanent exemptions from the new US tariffs. 


Tusk reiterated his unity message when it came to preserving the Iran deal, calling for protecting European companies from US decisions while curbing Iran's involvement in the Middle East.


Otherwise, German Chancellor Angela Merkel asserted the importance of negotiating the Iranian ballistic missile and the Iranian role in the Middle East in order to reach a better deal that includes all sides. 


On another note, the European Central Bank remarked on the Brexit period as a suitable tool to pave the way for a smooth and clean British exit, which would help banks and other corporations in preparation for their next moves. 


ECB member Vítor Constâncio said in earlier remarks that recent economic slowdown in Europe was unexpected but not dangerous, asserting that current ECB forecasts for growth remain viable. 


Otherwise, earlier US data showed housing starts fell 1.8% in April to an annualized 1.352 million units, compared to a 4.1% rise in March to 1.377 million, while analysts expected a 2.1% dip to 1.350 million. 


Building permits fell 3.7% to 1.287 million, compared to a 3.6% rise to 1.336 million in March, while analysts expected a 0.7% dip to 1.310 million. 


Federal Reserve Bank of Atlanta President Raphael Bostic spoke earlier about the economic outlook at the Augusta Cotton Exchange, where he pointed to Fed's uncertainty on how will US companies respond to tax cuts, with most polls so far indicating corporations aren't changing their spending plans in 2018. 


Bostic said consumer spending is strong but still not at its peak, expressing otherwise his support for three rate hikes this year, while pointing to the 3.9% unemployment rate as extremely low. 


US industrial production rose 0.7% in April, same as March and beating expectations of a slowdown in growth to 0.6%. 


The Capacity Utilization Rate rose to 78% in April from 77.6% in March, missing forecasts of 78.4%. 

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