Eurostat's latest data revealed that the Eurozone's Harmonized Index of Consumer Prices (HICP) grew by 2.5% year-over-year in June, slightly easing from the 2.6% rise recorded in May. This figure aligns with market expectations of a 2.5% increase.
Core HICP inflation, which excludes volatile items such as food and energy, also moderated to 2.8% YoY in June, down from 2.9% in May, consistent with forecasts.
On a monthly basis, Eurozone HICP edged up by 0.2% in June, matching the increase seen in May. Meanwhile, core inflation rose by 0.3% MoM, slightly lower than the 0.4% growth reported previously.
Key components contributing to inflation include services, which maintained an annual rate of 4.1% in June, stable from May, followed by food, alcohol, and tobacco at 2.5%, down from 2.6% in the previous month. Non-energy industrial goods remained stable at 0.7%, while energy prices decelerated to 0.2% from 0.3% in May.
The European Central Bank's inflation target stands at 2.0%, influencing market expectations for ECB policy decisions, including the potential for further interest rate adjustments.
Market Reaction
Despite the mixed inflation data, the Euro (EUR) showed resilience. EUR/USD was trading 0.18% lower on the day at 1.0171 following the release of the Eurozone inflation report.
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