Eurostat released Eurozone CPI data today for June, which remained unchanged and in line with expectations.
The final inflation reading for the Eurozone came in at 2.7% on a year on year basis. Rising fuel and electricity prices helped maintain the annual inflation rate from falling.
However, the core rate excluding food and energy rose to 1.8% beating expectations of a 1.5% increase compared to 1.7% in May.
Under “normal” times, this increase in inflation numbers would prompt the European Central Bank to continue to tighten policy as the core rate now moves toward the ECB’s 2.0% target.
However, these are not normal times and along with the change of leadership at the ECB suggests that we are going to see a mini pause with the next rate hike not likely until December, when it is expected that the rate will be increased to 2.00%.
EURUSD slowly edged up to 1.4257 within 25 minutes from a pre-news low of 1.4231.