Euro-zone inflation defies gravity and stands at 0.4%. It could have been worse. Core inflation is indeed worse at 0.7%, but the ECB’s mandate is the headline inflation, and that came out OK – very low, but not terrible as German numbers implied. The unemployment rate stands at 11.5% as expected.
EUR/USD recovers to 1.2580.
Official expectations for euro-zone CPI were for an annual level of 0.4% in October 2014, but the weak German data probably caused traders to adjust their expectations lower. Core inflation was expected to remain at 08% y/y.
EUR/USD was on the back foot towards the event, trading around 1.2560.
At the same time, Eurostat released the unemployment rate, and it was expected to remain unchanged at 11.5%.
Earlier, German retail sales disappointed with a 3.2% drop, French consumer spending disappointed with a drop of 0.8% and Italian unemployment disappointed with a rise to 12.6%.
The euro erased its post Fed fallout recovery. Here are 5 reasons for the fall of EUR/USD.
