The euro was trading lower against the US dollar on Wednesday, but losses seemed to remain capped, as the tension in Syria subsided, following the speech by the US President Barack Obama yesterday.
EUR/USD slipped to a session low at 1.3243 at 6:00 GMT, after which consolidation followed at 1.3254, losing 0.11% on a daily basis. Support for the pair was expected at the psychological 1.3200 level, while resistance was to be met at current session high, 1.3281.
On Tuesday US President Obama said that he would prefer a peaceful solution to the Syrian conflict and that there were “encouraging signs” of diplomacy, which would put an end to the confrontation over Assad regime’s alleged use of chemical weapons. He agreed to explore the plan, proposed by Russia, according to which Syria will have to put its chemical weapons under international superintendence. However, he stressed on that if the chemical attack by Assads regime was to be left unpunished, this could urge other dictators to consider such an act and US military forces could be faced with potential threat in the future.
Meanwhile, earlier on Wednesday it became clear that German final consumer price index (CPI) remained flat in August compared to July in line with preliminary estimates. In annual terms, it rose to 1.5% in August, again meeting preliminary estimates, as the index of consumer prices stood at 1.9% in July. Inflation of prices of energy products, including fuel, slowed down at a significant rate, to 0.5% in August from 2.9% in July, despite the fact that prices of electricity climbed 11.6% in August 2013 compared to August 2012. Prices of food also slowed its advance in August in comparison with the registered five-year peak of 5.7% increase in July.
In France, the index of non-farm payrolls dropped by 0.2% during the second quarter of the year compared to the first in consonance with projections.
Elsewhere, the euro was lower against the sterling, with EUR/GBP cross dipping 0.07% for the day to trade at 0.8429 at 7:09 GMT. EUR/JPY pair was losing 0.17% to trade at 132.98 at 7:10 GMT.
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