The German HICP – Harmonised Index of Consumer Prices – (used for European purposes and different to German CPI figures) inflation rose to 0.1% y/y in March. This was more than expected and lifted the headline rate back into positive territory, after the -0.1% y/y rate in February. Belgian numbers, released earlier also moved higher and the data is likely to set the stage for a rebound in the overall Eurozone headline rate this month, with base effects playing a role. For now this should at least limit speculation about further action from Draghi and the use of helicopter money, especially after Coeure suggested that the latter is an interesting academic option and favourite of the press, but not actively considered as a policy tool at the moment.
The EURUSD remains north of the psychological 1.1300 at 1.1315 today with the month high 1.1346 providing resistance further out. Support is provided by the the 10 and 20 Day Moving Averages at 1.1236 and 1.1154 respectively.
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Senior Currency Analyst
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