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Forex - EUR/JPY reverses losses as ECB rate outlook supports

Published 02/28/2011, 06:35 AM
Updated 02/28/2011, 06:35 AM

Investing.com – The euro erased losses against the yen on Monday, as the view that that the European Central Bank will hike interest rates ahead of other central banks boosted the single currency.

EUR/JPY clawed back up from 111.94, the pair’s lowest since February 8, to hit 113.28 during European morning trade, surging 0.86%.

The pair was likely to find support at 111.94, the days low and resistance at 113.81, the high of February 23.

The euro shrugged off data showing that final euro zone inflation data for January came in slightly softer than the initial estimate.

Eurostat said the annualized rate of consumer price inflation was 2.3% in January, lower than the 2.4% provisional estimate. However, January's rate was up from December's 2.2% increase and was the highest since October 2008.

The inflation rate was boosted by energy prices, which continued to increase in annual terms.

The euro was also higher against the Swiss franc, with EUR/CHF rising 0.55% to hit 1.2835.

Also Monday, European Economic and Monetary Affairs Commissioner Olli Rehn said the European Union will discuss reducing the interest rate on emergency loans to Ireland as part of its comprehensive response to the euro zone debt crisis.

 "We have a common goal for Ireland to revive its growth dynamic and succeed in ensuring debt sustainability," Rehn said.


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