The Euro has dropped in Friday trading – cancelling out its earlier gains on the back of a strong German unemployment report -- as Euro-Zone CPI data revealed that inflation in the region is now on a downward trend.
The European Central Bank can as a result be expected to continue purchasing assets and leave interest rates unchanged until well into 2018 – which puts fundamental pressure on the single currency.
Euro-Zone inflation in March fell to 1.5% from 2.0% in February and missed expectations of a 1.8% increase. Core CPI rose 0.7% against a prior month’s reading of 0.9% as energy and food prices moderated, again missing estimates of a rise of 0.9%.
After rallying on robust German jobs figures released earlier Friday, Euro crosses have steadied.
Chart: EURUSD 15’ Timeframe (March 31)
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For more on the inflation data, read the DailyFX Market Alert here
--- Written by Oliver Morrison, Analyst
To contact Oliver, email him at oliver.morrison@ig.com
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