Euro falls against Dollar after inflation data in the eurozone

The euro fell against the dollar on Thursday, after data showed that inflation in the euro zone is not as high as investors feared, after readings published by countries in the region during the past days.

Eurozone inflation fell to 8.5 percent in February from 8.6 percent a month earlier amid falling energy prices, but it was higher than experts’ expectations in a Reuters survey for inflation at 8.2 percent.

But the market’s reaction was limited after the euro rose 0.9 percent against the dollar on Wednesday, recording its largest daily jump in a month, after prices in Germany rose more than expected last month.

Inflation in Germany came higher than expected in February after also high readings in France and Spain, which reinforces the European Central Bank’s intention to raise interest rates.

The euro fell 0.5 percent against the dollar to $1.0618.

The British pound fell 0.46 percent to $1.1970. This came after Bank of England Governor Andrew Bailey’s remarks that “nothing has been decided” regarding future rate hikes, prompting traders to reduce their bets on a larger rate hike.

The yen fell 0.3 percent to 136.65 per dollar in early trade, while the Australian dollar, the New Zealand dollar and the Chinese yuan fell slightly after gains on Wednesday after data on manufacturing activity in China showed that factory activity in February grew at its fastest rate in a decade.