EUR/USD Little Changed After Lower Than Expected December CPI Figures
- The Euro was little changed versus the US Dollar
- Headline CPI at 0.2%, Core CPI Printing 0.9%, both below expectations
- The market has been selling the Euro since the start of the European session
The Euro-Zone’s Consumer Price Index (CPI) fell below expectations today as the preliminary headline reading showed consumer prices rose an annual 0.2% in December, which was below the expected 0.4%, unchanged from the prior 0.2% reading. Core CPI which strips out volatile elements like food and energy prices printed 0.9% percent, as the prior reading, which was below economists’ forecasts for a tick up to 1.0%.
The data today signals that, at the present moment, the ECB’s stimulus efforts are falling short from delivering their medium-term inflation target of just under 2%.The ECB expanded stimulus last month by extending the duration of QE and cutting the deposit rate to minus -0.3%. With inflation still far from target, expectations may start to form for further measures, which might be negative for the Euro. With that being said, the market has been selling the Euro since the start of the European session, perhaps in anticipation for weaker CPI readings to hit the wires after yesterday’s analogous German CPI figures came below expectations.