Euro-Zone Inflation Data Confirms Sharp Rise in Core Rate
- Euro-Zone inflation is likely to fall next month as Easter’s effects fall out.
- The single currency remains firm against a weak US Dollar.
Eurostat data confirmed Euro-Zone prices rose by 1.9% in April after falling back to 1.5% in March. The closely-watched core inflation – ex energy, food, alcohol and tobacco – rose to 1.2% from 0.7% prior, the highest rate since September 2013, and a glimmer of good news for ECB President Mario Draghi.
The rise in April’s inflation however is likely to have been fueled by a late Easter this year, with prices for holidays, hotels, air and sea transport all rising going into Easter.
Inflation is likely to slip lower next month, as Easter’s distortions fade, despite the Euro-Zone economy growing a decent clip. Growth is expected to touch 1.7% this year and 1.8% next year.
The single-currency barely moved on the final inflation releases, retaining its recent gains against both the USD and the GBP. The EUR made a six-month high against the USD earlier this week (1.11226) and made a six-week high (0.86156) against GBP.
Chart: EURUSD Daily Timeframe (January 26 - May 17, 2017).
--- Written by Nick Cawley, Analyst
To contact Nick, email him at firstname.lastname@example.org
Don't trade FX but want to learn more? Read the DailyFX Trading Guides
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.