The Eurozone Inflation estimate for April was greater that of the previous month, although the data showed levels of inflation to be a little lower than was expected. The Flash Consumer Price Index (CPI) for the Eurozone came out at 0.7% yesterday, lower than forecasts of 0.8%. However, given the significant effect of the poor CPI data from Germany on Tuesday, these figures caused the euro to strengthen against a number of major currencies. The sterling-euro rate moved a lot during the day due to the volume of data out on both sides of the channel but finished the day at close of markets in London at just below where it started. The euro fared much better against the US dollar, however, making consistent gains throughout the day. Other positive data from the Eurozone yesterday included German unemployment data and French consumer spending data, both of which were mildly better than expected.
Today is likely to be a quieter day for the Eurozone as the majority of the eighteen-nation bloc enjoy another bank holiday and thus data releases are limited. However, it should still be borne in mind that there are a number of major releases in the UK and the US which have the potential to affect currency movements.
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