Euro Falls After Lower-Than-Forecast Spanish Inflation Data

0725 GMT – The euro falls after data showed Spanish inflation eased by more than expected in March. The annual harmonized inflation rate fell to 3.1% in March from 6.0% in February, versus the 4.2% expected by analysts in a WSJ survey. The data comes ahead of German inflation data at 1200 GMT and the overall eurozone inflation print on Friday. With the European Central Bank saying its future policy decisions are data-dependent, this week’s inflation figures are set to be an important driver of the market’s interest rate expectations, ING analyst Francesco Pesole writes. EUR/USD falls to a low of 1.0825 after the data, from 1.0848 beforehand. (renae.dyer@wsj.com)

Dollar Steady After Modest Recovery

0713 GMT – The dollar steadies after a modest recovery Wednesday when the currency saw some delayed benefit from a favorable repricing of Federal Reserve interest rate expectations, ING says. The recent improvement in market sentiment has been accompanied by a pick-up in Fed rate expectations, which had been revised lower due to U.S. banking sector stress, but any gains for the dollar are likely to be limited, ING analyst Francesco Pesole says in a note. “We think the small recovery seen yesterday could be one of many along a gradual decline path, but would favor some consolidation around current levels today.” The DXY dollar index trades flat at 102.635. (renae.dyer@wsj.com)