Eurozone flash headline HICP cools down to 1.7% in January, as expected

Annual Harmonized Index of Consumer Prices (HICP) in the Eurozone, as measured by changes in the prices of a representative basket of goods and services in the European Monetary Union, rises by 1.7% in January, as expected, slower than 1.9% in December. On month, the headline HICP rose strongly by 2%.

Eurozone's annual core HICP - which excludes volatile components like food, energy, alcohol, and tobacco - grows in line with estimates and the prior release of 2.3%. Month-on-month core HICP rises 0.3% steadily.

Market reaction

There seems to be no immediate impact of the Eurozone HICP data on the Euro (EUR). As of writing, EUR/USD trades subduedly near 1.1810.

(The section below was published at 08:16 GMT as a preview of the preliminary Eurozone HICP data for January)

The Eurozone Prelim HICP Overview

Eurostat will publish the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for January later on Wednesday at 10:00 GMT.

Eurozone HICP inflation is expected to ease to 1.7% year-over-year (YoY) in January, from 1.9% in December. Meanwhile, the annual core inflation is anticipated to remain consistent at 2.3% in the reported month.

The monthly Eurozone inflation and core inflation were at 0.2% and 0.3%, respectively, in December.

How could the Eurozone Prelim HICP affect EUR/USD?

The EUR/USD pair may remain steady if the HICP data come as expected. Traders are awaiting the European Central Bank’s (ECB) interest rate decision due on Thursday. The ECB is widely expected to leave key rates unchanged at its February policy meeting, extending the pause to a fifth consecutive meeting.

Attention will turn to the ECB press conference for signals on the rate outlook. Swedbank economist Nerijus Maciulis said ECB President Christine Lagarde is likely to stress that the euro-area economy remains resilient, although risks stay elevated. He added that early 2026 has highlighted the fragility of trade deals and agreements.

Later on Wednesday, traders will focus on the Institute for Supply Management’s (ISM) Services PMI, expected to ease to 53.5 in January from 54.4 previously. Meanwhile, the Bureau of Labor Statistics (BLS) will not release the January employment report on Friday as scheduled due to the partial government shutdown that began last weekend.

Technically, the EUR/USD pair extends its gains for the second successive session, trading around 1.1830 at the time of writing. Technical analysis of the daily chart indicates a bullish bias; the 14-day Relative Strength Index (RSI) at 55 confirms strong momentum.