European standard HICP German inflation fell to only 0.6%. Month over month, this is a drop of 0.3%. Y/y CPI stands at 0.9% and =0.1% m/m. Official expectations for CPI stood on 1.1% y/y and 0.2% m/m. HICP expectations (European standard) stood on +1% m/m and +0.2% m/m. In April, CPI rose 1.3% and HICP came out at 1.1%. However, early releases by the various German states already showed significantly lower y/y price rises that put some pressure on the euro.
EUR/USD traded around 1.3610 towards the publication, after already dipping below 1.36. The pair is grinding towards 1.36.
Update: it seems that the low figures were somewhat priced in. EUR/USD is back to 1.3613.
Germany is the largest economy in the euro-zone and its central bank has the strongest voice in the ECB. The initial German numbers carry a lot of weight in the all-European inflation numbers released tomorrow.
See how to trade the euro-zone CPI release with EUR/USD.
EUR/USD has been pushed lower since early May, when Mario Draghi made an imminent threat to act in June, if the medium term forecasts point to a danger of lower inflation. It was on the verge of breaking 1.40 before it began its journey south.
Support awaits the pair at 1.3560 and resistance at 1.3650. For more, see the EUR/USD prediction.
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