Inflationary Pressures Deliver EUR Support

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.