The euro dipped
and bond yields hit multi-week lows on Thursday as easing inflation in
Spain and Germany led investors to row back further on expectations of
when the European Central Bank might tighten monetary policy.
The single currency EUR=
dipped 0.3 percent against the dollar and the yield on Germany's
10-year government bond DE10YT=TWEB, the benchmark security for the
region, hit a three-week low.
Signs of economic strength and strong inflation data - and an acknowledgement of these factors by policymakers - fueled talk that the ECB might soon switch out of stimulus mode and follow in the footsteps of the U.S. Federal Reserve, which has embarked on a rate hike cycle.
But annual consumer inflation in Spain eased to 2.1 percent in March, missing Reuters poll forecasts of 2.7 percent, and regional German data pointed to a similar downturn in Europe's biggest economy.
On Wednesday six sources in and close to the ECB governing council told Reuters euro zone policymakers were keen to reassure investors that their easy money policy was far from ending.
Euro may have also come under pressure after British Prime Minister Theresa May formally began Britain's exit from the European Union on Wednesday, launching a two-year negotiation process before the divorce comes into effect in late March 2019.
Sterling was down 0.13 percent at $1.2415 GBP=, having skidded to a one-week low of $1.2377 overnight after British Prime Minister Theresa May formally launched Britain's divorce proceedings from the European Union.
Oil prices, up on disruptions in Libya, buoyed European stocks .FTEU3, which were up 0.8 percent while the broader Euro STOXX 600 was up 0.1 percent.
Earlier, Asian stocks came off two-year highs on a strengthening dollar, up 0.14 percent against a basket of six currencies on Thursday morning. .DXY
Signs of economic strength and strong inflation data - and an acknowledgement of these factors by policymakers - fueled talk that the ECB might soon switch out of stimulus mode and follow in the footsteps of the U.S. Federal Reserve, which has embarked on a rate hike cycle.
But annual consumer inflation in Spain eased to 2.1 percent in March, missing Reuters poll forecasts of 2.7 percent, and regional German data pointed to a similar downturn in Europe's biggest economy.
On Wednesday six sources in and close to the ECB governing council told Reuters euro zone policymakers were keen to reassure investors that their easy money policy was far from ending.
Euro may have also come under pressure after British Prime Minister Theresa May formally began Britain's exit from the European Union on Wednesday, launching a two-year negotiation process before the divorce comes into effect in late March 2019.
Sterling was down 0.13 percent at $1.2415 GBP=, having skidded to a one-week low of $1.2377 overnight after British Prime Minister Theresa May formally launched Britain's divorce proceedings from the European Union.
Oil prices, up on disruptions in Libya, buoyed European stocks .FTEU3, which were up 0.8 percent while the broader Euro STOXX 600 was up 0.1 percent.
Earlier, Asian stocks came off two-year highs on a strengthening dollar, up 0.14 percent against a basket of six currencies on Thursday morning. .DXY
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