Eurozone flash HICP rises 3.3% YoY in August, as expected

Sagar Dua FXStreet

Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) data for August arrives at 3.3% Year-on-Year (YoY), as expected, higher than the previous reading of 2.9%. On a monthly basis, inflationary pressures grew at a faster pace of 0.4% against the prior release of 0.2%.

The core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – arrives at 2.4% YoY, lower than estimates and the prior release of 2.5%. Month-on-month core HICP rises by 0.2% after remaining flat in July.

Market reaction

There seems to be a marginal positive impact of the Eurozone HICP data on the Euro (EUR), but it is still sharply lower against the US Dollar. At press time, EUR/USD trades 0.2% lower to near 1.1595.

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

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