EUR/USD has slipped back very marginally, presently at 1.3645 compared to a North American close Wednesday up around 1.3660. The move comes with heightened speculation the Chinese to cut back stimulus and tighten monetary policy very soon.. This increased anticipation comes after the release of a raft of strong economic data overnight.
China’s inflation rate reached a 16 month high in February, showing a 2.7% y/y rise, stronger than median forecast of 2.5%. Industrial output has risen 20.7% in first two months of 2010, February M2 money supply up 25.5% and retail sales up 17.9% in first two months of 2010 from year earlier.
The Chinese for their part don’t seem overly concerned, with PBOC’s Su Ning reportedly saying China is not witnessing inflation pressure yet.
Oh well, guess it’s a bit of a diversion from Greek woes.
For today little of note on the euro zone data front
07:45 GMT: French central government balance -140 bln; non-farm payrolls Q4 -0.4% q/q
10:00 GMT: ECB monthly report.