Eurozone Preliminary CPI beats estimates with 0.3% YoY in June, EUR/USD uninpsired

Dhwani Mehta FXStreet

According to Eurostat’s flash reading of Eurozone CPI report, the annual reading came in at +0.3% in June, meeting expectations of +0.1% and +0.1% previous.

The headline inflation had hit the lowest since June 2016 last month due to the coronavirus pandemic led reduced fuel and energy demand.

Meanwhile, the core figures steadied at +0.8% in the reported month when compared to +0.8% expectations and +0.9% previous.

Key details (via Eurostat)

“Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in June (3.1%, compared with 3.4% in May), followed by services (1.2%, compared with 1.3% in May), non-energy industrial goods (0.2%, stable compared with May) and energy (-9.4%, compared with -11.9% in May).”

The Eurozone inflation report comes a day after the German Prelim CPI data was released, which showed that the German consumer price inflation accelerated by 0.8% in June and moved a tad closer to the European Central Bank’s (ECB) rate target of just under 2% for the Eurozone as a whole.

FX implications

The acceleration in the headline Eurozone inflation figure fails to impress the EUR bulls, as EUR/USD keeps its range around 1.1220, down 0.20% on the day. The souring risk sentiment boosts the greenback at the expense of the single currency.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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