Inflation in both the 17-strong eurozone bloc and the US has fallen to its lowest level in years.
The eurozone figure, for April fell to 1.2% – a three-year low. US inflation was running at 1.1% – a two-year low. Both countries target inflation at 2%.
In both cases the prime cause of the fall was a lower oil price, which is down from just less than $120 a barrel in March to about $93 a barrel now.
Weak demand across both economies was also a factor.
The sharp fall in the cost of fuel caused the US monthly inflation rate to fall at its sharpest pace since December 2008.
The US economy is growing more strongly than most of Europe, but remains patchy, while high unemployment has put downward pressure on wages, making it harder for retailers and other firms to raise prices.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Dean Popplewell
Latest posts by Dean Popplewell (see all)
- Euro zone bond yields sink as German manufacturing slows - 24 July 2019
- How Boris Johnson Plans to Deliver Brexit in 100 Days - 24 July 2019
- Weak PMI’s Sink EUR - 24 July 2019