Prices in the euro-zone advanced by 0.5% in the final read for October, as expected. Month over month, prices rose by only 0.2%, slightly below 0.3% expected. Core inflation was confirmed at 0.8%, which has been very stable. Another measure of core inflation, excluding only fuel, rose by 0.7%.
EUR/USD ticks down just a bit to 1.0720, which is quite insignificant. The next move depends on the US: inflation data from the other side of the Atlantic as well as Yellen’s speech are up next.
The final euro-zone inflation read for October 2016 was expected to confirm the preliminary read: 0.5% in headline inflation and 0.8% in core inflation.
EUR/USD was recovered from the falls related to the dollar’s Trump rally, and traded above resistance, at 1.0725, just before the publication.
The base effect of falling oil prices has been diminishing and that is what helps headline inflation advance. This is the sole mandate of the European Central Bank. However, the ECB also eyes core inflation and this has not been advancing.
The calls for EUR/USD parity are growing and growing. However, such calls did not come to fruition in the past. The low for 2015 has been 1.0460 and another attempt to move lower stopped at 1.0520. At current levels, resistance awaits at 1.0820 and 1.0910.
Here is how the move looks in the 30-minute chart.
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