Euro Doesn't React to as-Expected German Inflation Data
German May inflation data was in line with previous estimates today, coming in at 2.2% percent compared to May 2011. Prices dropped 0.2% on the month, the German stats bureau said. Falling energy prices contributed to the fall in inflation, offsetting a strong performance in the German labor market.
Inflation in Germany has slowed from 2.9% in October 2011 as energy prices fall and the European debt crisis continues to weigh on economic growth. However, prices are expected to rise in the medium to long term as German labor unions lobby for above-inflation wage increases and unemployment remains at a two-decade low.
The Euro traded quietly against the US Dollar and Japanese Yen following today’s release. The single currency has rebounded over the past week after a political reshuffle in Europe caused major weakness in the single currency in May’s beginning.
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