Forex News: Euro-Zone Producer Prices Rise Slightly and Beat Expectations
THE TAKEAWAY: Euro-zone producer prices rise 0.1% in October -> Change in PPI beats expectations -> Euro rallies on optimism before meeting
Prices paid by producers increased for the third straight month in October. The Producer Prices Index was 0.1% higher on a monthly basis, beating expectations for no change in prices, and lower than September’s 0.2% rise in producer prices. The PPI was 2.6% higher when compared to October 2011, according to Eurostat.
The prices of non-durable consumer goods rose 0.2% for industrial producers, while prices in the energy sector fell 0.2% in the Euro-zone. The Netherlands and Belgium saw a 0.8% rise in producer prices, while Greece saw a 1.0% decline in prices.
The PPI was slightly higher than the annual change in consumer prices, which was reported at 2.5% in October. The combination of slow growth and lower inflation could be seen as reasons for the ECB to cut the interest rate in their next meeting, which would be Euro negative.
However, the Euro did not react to the higher than expected producer prices. EURUSD is currently trading around 1.3075 in forex markets, following an earlier rally on optimism for the EU ministers meeting. Resistance could now be provided by a previous 2.5-month high at 1.3139.
EURUSD Daily: December 4, 2012
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