Eurozone: Spain's and French inflation rise beating expectations

Although inflation in France has not reached the double digits for the whole Euro region, it still shows no signs of reversing. It will not be easy for the ECB to get inflation back to its "close but below 2%" target.

Spain's CPI rose by 1% in February, and annual inflation accelerated from 5.9% to 6.1%. In France, prices rose 0.9% m/m, accelerating to 6.2% y/y. For forex traders, it is also important to note that the figure was higher than forecast, forcing a reassessment of expectations for Thursday's release of the region's overall index.

Although inflation in France has not reached the double digits for the whole Euro region, it still shows no signs of reversing. It will not be easy for the ECB to get inflation back to its "close but below 2%" target.

The higher-than-expected inflation rate supported Euro buying on Tuesday, pushing EURUSD back above 1.06 after a long downtrend triggered by strong US inflation. This currency tug-of-war has every chance of continuing as the labour market remains strong in both cases, creating a price spiral.

Alex Kuptsikevich

Financial market professional with 16-years' experience and Senior financial analyst at FxPro. Author of daily reviews on the impact of economic events with comments regularly featured in top international and Russian media. Covers fundamental analysis, global markets, foreign exchange market, gold, oil, cryptocurrencies.

Alex Kuptsikevich is a regular contributor to both digital and print media including CNBC, Forbes, Reuters, MarketWatch, BBC and Coindesk.

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eurozone spain inflation france inflation

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Although inflation in France has not reached the double digits for the whole Euro region, it still shows no signs of reversing. It will not be easy for the ECB to get inflation back to its "close but below 2%" target.

Alex Kuptsikevich

Topics