German inflation slows to 2.8% in October, below forecasts
Germany's annual consumer price inflation eased to 2.8% in October from 3.3% in September, missing market expectations and weighing slightly on the euro.
Preliminary data from Germany’s statistics office, Destatis, released on Friday showed consumer prices rose 2.8% year-on-year in October, down from 3.3% in September. Economists had expected a smaller slowdown.
On a monthly basis, the consumer price index (CPI) fell 0.2%, reversing the 0.6% gain seen in September and undershooting the forecast for a 0.1% rise.
The Harmonized Index of Consumer Prices (HICP), the inflation measure the European Central Bank (ECB) tracks most closely across the eurozone, also came in at 2.8% year-on-year, below both September’s reading and market expectations of 3.1%.
EUR/USD dipped slightly after the release, slipping to around 1.1170 as the softer inflation print reduced near-term pressure on the ECB to keep policy tight.
Why it matters: Weaker-than-expected German inflation, a key input for eurozone-wide price trends, can lower expectations for ECB rate hikes and typically weighs on the euro against the US dollar. It also feeds into broader eurozone bond market pricing, as traders adjust views on how long the ECB may hold rates at current levels.
Source: FXStreet