EUR/USD Unfazed as Unemployment and Inflation Fail to Surprise
- The Euro was little changed versus other major currencies
- Euro-Zone Core CPI at 0.8% vs 0.7% prior
- Euro-Zone unemployment rate unchanged at 10.2%
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The Euro was little changed versus other major currencies (at the time this report was written), after the Euro-Zone Consumer Price Index (CPI) flash estimate, and the unemployment rate, came in line with expectations.
Headline CPI figure showed an annual decline of 0.1% percent, above the prior figure of -0.2%, in line with expectations. The figure marked the fourth consecutive month in which the Euro-Zone has been in negative territory.
Core CPI, which excludes volatile factors such as food, energy, alcohol, and tobacco, strengthened slightly and printed +0.8%, above the prior +0.7%, and was in line with expectations as well.
The report said that services is expected to have the highest annual rate in May followed by food, alcohol & tobacco.
Along with the inflation report, Eurostat also released the unemployment figures, which showed the Euro-Zone unemployment rate remained unchanged at a seasonally-adjusted 10.2% in April, as expected. This is the lowest rate since August 2011.
The ECB’s Governing Council is set to meet June 2 and announce the bank’s rate decision. The central bank will also present updated forecasts. The inflation report signals that the central bank’s stimulus efforts has thus far failed to push inflation to mandate target of close to, but below, 2%.
As was mentioned earlier today by DailyFX Currency Strategist Ilya Spivak, the ECB remains in wait-and-see mode, monitoring progress on stimulus measures announced in March. Taking this into consideration, and the fact that the figures came in line with expectations, might help to explain why the figures did little to sway the Euro, which was little changed versus other major currencies.
The DailyFX Speculative Sentiment Index (SSI) is showing that about 51.4% of traders are long the EUR/USD at the time of writing.
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EUR/USD 5-Minute Chart: May 31, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.