Battered Euro Takes Breather Near 9-Month Lows

(RTTNews) - The euro steadied versus the dollar on Friday after suffering significant losses earlier in the week, crippled by debt concerns and speculation the US economic recovery is leaving the euro area in the dust.

The euro was further punished yesterday when the Federal Reserve surprisingly raised its emergency lending rate for US banks, another step in unwinding the measures taken to prop up the fiscal system and broader economy in the wake of the worst recession in decades.

There was little reaction to Friday's major economic news. US consumer prices rose less than forecast in January, while prices excluding volatile food and energy dropped for the first time in nearly three decades, easing concerns about inflationary pressures.

The Labor Department's seasonally adjusted Consumer Price Index rose 0.2 percent last month, matching December's rise, while analysts were expecting prices to increase by 0.3 percent.

The euro held near 1.3500 over the course of Friday's session, having touched a 9-month low of 1.3444 late last night.

On the flip side, the euro gained on the yen, advancing to 124.65 in a move away from a recent yearly low of 120.69.

Eurozone's private sector output growth stable in February, a flash report from the Markit Economics said on Friday. The composite output index stood at 53.7 in February, unchanged from the previous month.

Across the English Channel, cold weather and restoration of the value added tax to 17.5% dampened British household spending in January with sales falling sharply.

Retail sales volume dropped 1.8% on a monthly basis in January, following a revised 0.2% fall in December, the Office for National Statistics said in a report on Friday. This was the biggest decrease since June 2008.