European Inflation Rises Yet Still Below Expectations

Euro zone inflation picked up in April, but remained below expectations, maintaining pressure on the European Central Bank (ECB) to stimulate the economy.

Consumer prices rose by 0.7 percent year-on-year in April, according to flash estimates released by Eurostat Wednesday, marking an uptick from March’s 52-month low of 0.5 percent.

But the figure was still lower than analyst forecasts of 0.8 percent, and means inflation is still significantly below the ECB’s target of close to 2 percent. April was the seventh month in a row that inflation in the 18-country currency bloc came in below 1 percent.

The euro fell sharply against the dollar following the data, but bounced back to trade higher in mid-morning London trade.

The euro zone-wide data came after preliminary data Tuesday showed that German annual inflation came in weaker than expected in April, rising by just 1.1 percent. Analysts had expected inflation of 1.3 percent in the euro zone’s largest economy.

via CNBC

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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