Eurozone Inflation

The Euro to Dollar exchange rate climbed back toward 1.07 in the penultimate session of the week after Eurostat figures suggested continental inflation fell further than was expected in a May outcome that could mean the single currency has scope for a rebound toward 1.11 in the weeks ahead.  

European inflation ticked higher in April for the first time since September but the more closely watched measure of core inflation edged lower in a Eurostat report that has uncertain implications for European Central Bank (ECB) monetary policy ahead of Thursday's interest rate decision. 

The Euro to Dollar exchange rate entered the new month procrastinating around the 1.10 handle but would likely struggle to sustain itself above that level unless this week's central bank policy decisions provide the single currency with a clearer interest rate advantage over the greenback.

European Central Bank President Christine Lagarde warned in the ECB's final press conference of the year that "a relatively short-lived and shallow" technical recession may be seen in the months ahead due to a growing collection of economic ailments stemming from the energy crisis. 

Eurozone CPI inflation rose 9.1% year-on-year in August according to Eurostat, up from 8.9% in July and beating expectations for a reading of 9.0%, deepening the region's cost of living crisis.

Early data out of Germany suggests the inflation peak might have passed, resulting in falling Eurozone bond yields and Euro exchange rates.

Europe’s inflation rates leapfrogged the market consensus again when climbing to new records for the month of May, vindicating in the process an shift in the monetary policy stance underway at the European Central Bank (ECB) but also likely adding fuel to an already impassioned debate.

"EZ inflation to settle well below target and one of the lowest in G10 once base effects fade".

Europe's preliminary inflation figures surprised on the downside of economist expectations on Wednesday, revealing in the process that the threat of deflation remains alive and well on parts of the bloc even as prices surge in others, vindicating the increasingly nuanced crisis response of the European Central Bank (ECB). 

The Euro-to-Dollar rate was on course for a hat-trick of declines Wednesday as European denominations lagged other risk currencies as well as a resurgent Dollar, and even after January's blowout inflation reading, although the nearby 1.20 level offers formidable support to Europe's single currency.  

German inflation for January rose 1.0% on a year-on-year comparison, a sizeable rise from the -0.3% reported in December and well ahead of the 0.7% rise markets had been expecting.

The Euro was in retreat from close to three-year highs against a steadier Dollar on Thursday after inflation and retail sales figures from the Eurozone disappointed the market, while investors weighed a shifting U.S. political landscape and disorder in Washington. 

The Euro-to-Dollar rate held above the 1.17 handle in a show of resilience Friday after being lifted by the revelation that President Donald Trump has contracted coronavirus and as one-off factors were seen to be behind a worse-than-expected set of Eurozone inflation figures for September. 

The Euro-to-Dollar exchange rate rose to its highest level since April 2018 on Tuesday amid further widespread declines in U.S. exchange rates although lower-than-expected inflation figures have served the market a reminder of what is a growing risk to the outlook for the single currency.

The Euro-to-Dollar rate was looking for a foothold above earlier technical resistance Wednesday having broken to new highs in the prior session, although parts of the analyst community are increasingly questioning whether it will be able to sustain such lofty heights without setback. 

The Euro-to-Dollar rate was underperforming Friday, prompting the single currency lower against most major counterparts after a volley of economic data surprised on the downside and as investors appeared to cool it on wagers against the greenback ahead of the weekend. 

The Euro-to-Dollar rate slipped lower Friday even in spite of official data revealing a sharp increase in both of the Eurozone's key measures of inflation, although the decline might have more to do with a U.S. greenback that appears to be rising from an early grave ahead of April's nonfarm payrolls report due out at 13:30.

The Euro bit its thumb at Eurostat's estimates of Eurozone inflation in February this Friday, rising against the Dollar after official data showed core consumer prices retreating again last month. 

The Euro was boosted in the final session of the week by official data revealing a surprise increase in the rate of core inflation for the month of January, which bodes well for the European Central Bank (ECB) outlook although economists have warned that one month alone does not make a trend. 

The Euro retreated from the week's high on Friday after official data revealed a steeper-than-expected fall in inflation during the month of November, adding further to an existing headache for the European Central Bank (ECB).