EUR/USD pared gains after Euro zone data points

The euro trimmed earlier gains, but remained on positive territory against the US dollar, following the release of the harmonized index of consumer prices out of the Euro zone.

EUR/USD slipped to a session low at 1.3341 at 9:10 GMT, after which consolidation followed at 1.3350, still up by 0.34% for the day. Support was likely to be found at September 13th low, 1.3253, while resistance was to be met at psychological level of 1.3400.

Consumer inflation in the Euro zone, evaluated in consonance with the harmonized methodology, remained without change in August, meeting preliminary estimates. According to data by Eurostat, the harmonized index of consumer prices rose by 0.1% in August on a monthly basis, after the registered 0.5% drop in July. In annual terms, the index climbed 1.3% in August, retaining the rate of increase in July and in line with projections. Yet, consumer inflation remained below the targeted level of 2% by the European Central Bank (ECB), which is considered as ensuring price stability in the region.

In addition, ECB President Mario Draghi affirmed his future course, regarding interest rates, as he intends to keep them unchanged or even consider a reduction over an extended period of time due to fragile economy in the common currency bloc. At a business conference today in Berlin, Mario Draghi called on the countries of the bloc to accelerate their economic growth, employment and competitiveness, as economic recovery was still at an initial stage. Draghi said that a certain improvement towards stabilization was already present. Earlier in September the central bank left its benchmark interest rate unchanged at the record low level of 0.50%, despite its upward revision of economic growth outlook for 2013.

Meanwhile, US dollar was losing ground against peers earlier, after it became clear that President Obama’s favorite candidate for the post of Federal Reserve Chairman until yesterday, Lawrence Summers withdrew from the contest. This eased concerns that he would roll back stimulus measures more eagerly than his main contender for the Governor post, Janet Yellen.

Market participants were eyeing the two-day meeting on policy by the Federal Reserve Bank starting tomorrow, as most experts projected a possible reduction of scale of stimulus to 75 billion USD from the current monthly pace of 85 billion USD of asset purchases.

Elsewhere, the euro was steady against the sterling, as EUR/GBP cross added 0.05% on a daily basis to trade at 0.8386 at 11:40 GMT. EUR/JPY pair was also advancing 0.05% to trade at 132.10 at 11:45 GMT.