Inflationary Pressures Deliver EUR Support
Energy prices continued to support a pickup in inflationary pressures, with Germany’s annual rate of inflation accelerating to 2.5%… The ECB doves have limited the upside for the EUR, however.
Economic data from the Eurozone was on the quieter side this morning with inflation back in focus.
In May, German consumer prices increased by 0.5%, following a 0.7% rise in April. Economists had forecast a 0.5% rise.
According to Destatis,
- Year-on-year, the annual rate of inflation accelerated from 2.0% to 2.5%.
- Prices for goods rose by 3.1%, driven by a 10.0% jump in energy prices.
- Food prices increased by a modest 1.5%, while prices for services increased by 2.2%.
From Italy, consumer prices held steady in May, following on from a 0.4% increase in April. Economists had forecast a 0.4% rise.
According to istat.it,
- While stalling in the month of May, the annual rate of inflation ticked up from 1.1% to 1.3%.
- Prices of energy products jumped by 13.8%, supporting the pick up in the annual rate of inflation.
Inflation figures from Spain were also out but had a muted impact on the majors. Spain’s annual rate of inflation accelerated from 2.2% to 2.7% in May, according to prelim figures.
Market Impact
Ahead of today’s numbers the EUR had risen to a pre-stat and current day high $1.22043 before falling to a pre-stat and current day low $1.21835.
While under pressure following disappointing inflation figures from Italy, German inflation figures provided support.
The EUR recovered from a fall to $1.2185 levels to return to $1.22 levels.
At the time of writing, the EUR was up by 0.08% to $1.22011.
