Eurozone Inflation Doesn't Budge from 3-Year High as Payrolls Shrink
THE TAKEAWAY: Eurozone CPI unchanged -> ECB awaits effect of rate cut -> Economic growth primary concern -> Euro unaffected, fails to bounce after latest weakening…
The yearly inflation rate in the 17-member Euro bloc held at 3.0%, the European Union’s statistics bureau said today in a release. The rate was in accordance with the median prediction by a team of economists. Inflation grew 0.1% on the month as employment declined, the release added. Current EMU inflation levels are the highest since 2008.
The European Central Bank, fronted by President Mario Draghi, has struggled to contain inflation which also addressing lagging growth levels in the beleaguered EMU over the past months. Last week, the ECB cut its benchmark interest rate in a bid to stimulate growth. The ECB also recently cut its 2012 growth forecasts, and explained that it expects inflation issues to play second fiddle to broader growth concern as the Eurozone attempts to extradite itself from a far-reaching credit crunch.
The latest inflation data failed to significantly affect markets and the Euro remained well offered as the US Dollar saw broad-based support. The Euro yesterday broke under key levels at 1.3000, and is currently trading at its lowest level since last January.
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