Search ForexCrunch

Inflation data coming from the various German states points to a significantly lower  CPI read for December. Could we see outright deflation in the euro-zone already for the of 2014?

The full German release is due later on, and the euro awaits it in fear.

Some year over year figures:

  • North Rhine Westphalia, which is considered one of the most important states in the German heartland, saw a fall from 0.7% to 0.1%.
  • Hesse has a flat 0% read for December after 0.5% in November.
  • Bavaria also sees a 0.5% fall from 0.8% to 0.3%.
  • Brandenburg has 0.3%,  down from 0.7%

While German inflation is probably due to remain positive for the month of December, the locomotive’s numbers have always been above the  euro-zone average and we could certainly see a negative number for the whole euro-zone. It is released tomorrow.

For example, Spain reported a fall of no less than 1.1% in prices. This was released before the turn of the year and has already hurt the common currency.

Also the worries about Greece weigh.

More:  EUR/USD collapses fast – 6 reasons – Nomura