German producer prices came in lower than forecast, rising 0.4% - the slowest since Nov ’10 - from February amid expectations of a 0.8% rise and 6.2% from a year earlier missing forecasts of 6.6%. The breakdown shows declines in goods ranging from food & beverages to manufacturing while fuel and oil related products continued to rise, but not enough to offset to broad decelerations, on the whole prices continued to rise in March albeit at a slower pace.
The euro caught some fresh bids despite the softer than forecast reading as prices continue to rise in the euro-region. The ECB recently hiked rates to try and reign in rising inflationary pressures in the region, if prices continue to rise the ECB may be forced to act again on interest rates to tamp down consumer prices. As players continue to try and effort the ECB next moves any potential second-degree effects of inflation or rising prices will likely spur euro gains as expectations begin to rise again regarding further rate action.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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