BREAKING: EUR strengthens after German inflation data

Annual inflation rate in Germany remained unchanged at 8.7 % YoY in February,  above market estimates of 8.5%, preliminary estimates showed. 

The latest reading pointed to a sticky inflation amid a robust labor market in Europe's largest economy, providing support to the European Central Bank's hawkish stance. Services inflation accelerated to 4.7% in February from 4.5% in January, with rent prices advancing 2.0%, the same pace as the month before. Meanwhile, goods inflation eased slightly to 12.4% from 12.7%, as a slowdown in energy inflation (19.1% vs 23.1%) partially offset a sharper increase in the cost for food (21.8% vs 20.2%). 

On a monthly basis, the inflation fell to 0.80%%, from 1.0% in February, above market estimates of 0.6%.

Harmonised Inflation Rate YoY  increased to 9.3% in March from 9.2% in January. Compared to the previous month the harmonized CPI jumped 1%, the highest rate in four months.

Earlier releases of CPI reports from German regions showed mixed figures:

• North Rhine Westphalia: 8.5% YoY vs 8.3% YoY previously

• Bavaria: 8.8% YoY vs 8.8% YoY previously

• Hesse: 8.3% YoY vs 8.5% YoY previously

• Brandenburg: 8.7% YoY vs 8.7% YoY previously

• Baden-Wuerttemberg: 8.7% YoY vs 8.5% YoY

• Saxony: 9.2% YoY vs 9.2% YoY

EURUSD is trading higher today and fresh data provided more fuel for bulls. The main currency pair is moving towards resistance zone in the 1.0700 area. Source: xStation5