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Euro Trading Slightly Higher as Core Inflation Upticks

Euro Trading Slightly Higher as Core Inflation Upticks

Oded Shimoni, Junior Currency Analyst


Talking Points:

- The Euro trading slightly higher versus other major currencies

- Headline CPI at -0.1%, as expected. Core CPI Printing +1.0%, better than expected

- The pickup in the Core rate may have boosted the appeal of the single-currency

See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot.

The Euro traded slightly higher versus most major currencies (at the time this report was written) after the Euro-Zone’s Consumer Price Index (CPI) figures released today by Eurostat, the statistical office of the European Union, showed a slight uptick in Core Inflation in March. The preliminary headline reading showed consumer prices fell an annualized -0.1%, which was in line with expectations. The prior reading was -0.2%. Core CPI, which strips out volatile elements like food and energy prices, printed +1.0% percent, above the prior +0.8%, and the expected +0.9% (all annualized as well).

The European Central Bank (ECB) will start to increase bond purchases to 80 billion euros from the prior 60 billion euros this Friday after announcing new stimulus measures earlier this month, with the central bank targeting a rate of close to, but lower than 2% inflation.

The figures released today indicate that the ECB is still far from reaching their objectives, but as was mentioned earlier today by DailyFX Currency Analyst David Song, the pickup in the core rate of inflation may have boosted the appeal of the single-currency. It seems the market interpreted the figures as supporting a view for a lesser need from the ECB for additional monetary support, and the Euro traded higher versus most major currencies.

EUR/USD 5 Minute Chart: March 31, 2016

--- Written by Oded Shimoni, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.