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Euro hit by Spanish CPI
The euro is trading at $1.2696. The single currency dipped below the $1.27 mark on Friday evening and remained under the handle in overnight trading. This morning, Madrid announced that CPI slipped by 0.2% in September, adding to Mario Draghi’s worries about deflation. The Spanish economy is deemed to be in the second tier of eurozone economies so its influence in the overall currency region is large. Tomorrow, the eurozone CPI data will be announced and the consensus is for a reading of 0.3%.
The euro has lost so much ground to the US dollar but if the CPI report matches or exceeds estimates the euro could pull back to $1.2733. However, weak inflation figures could drive the euro to $1.26.