EU Commission Cuts Inflation Forecast

The European Commission has cut its eurozone inflation forecast after lower-than-expected price rises at the start of the year.
It expects consumer prices to rise by just 1pc over the course of 2014, well below its target of close to 2pc. As recently as November, the Commission had expected eurozone inflation to hit 1.5pc this year.
However, the report maintained that the risk of the eurozone tipping into deflation is small since the economy is showing signs of increased momentum. It predicted that inflation would pick up slightly in 2015 to 1.25pc.
“Given the gradually strengthening recovery and the increase in confidence, there is only a marginal probability of shocks large enough to de-anchor inflation expectations and initiate EU-wide deflation,” it said.
A prolonged period of low inflation, however, could still be harmful to the economic recovery, warned Olli Rehn, the EU’s top official for economic and monetary affairs.

via Telegraph

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza