An overnight rally for the euro failed to hold as the morning session dawned in London, as the late July bounce continues to fizzle out.
As expected, eurozone consumer prices shrank by 0.5% during July, according to data from Eurostat. Year-on-year price growth remained steady at 2.4%, thus providing little reason for the euro to rally. The consistent growth in CPI means that the ECB still has room to cut rates as needed, although at its latest meeting the entire governing council thought the time was not yet right to reduce interest rates.
The euro briefly rallied to a one-month high near $1.30 during the Asian session, but a combination of no news and some modest dollar strength means that the single currency is finding it hard to make upward progress.