19.04.201804:06 Forex Analysis & Reviews: Inflation in the euro area continues to slow down

Released data on inflation in the euro area led to the formation of temporary pressure on the European currency, which managed to update the intermediate level of support in tandem with the US dollar. However, as we can see now, buyers quickly returned to the market, maintaining the upward trend of the trading instrument.

According to the report of the EU statistical agency Eurostat, the growth rates of consumer price inflation in the euro area in March this year were low, which is slightly worse than the one presented in the first assessment. All this suggests that the European Central Bank has less and less time to swing inflation by the fall of this year, when the regulator plans to declare a complete curtailment of the asset repurchase program.

Thus, the consumer price index in March 2018 increased by 1.3% compared to the same period of the previous year after the growth of 1.1% in February. Initially reported growth of 1.4%.

Compared to February, the consumer price index rose by 1.0%, which fully coincided with the forecasts of economists.

The base consumer price index in March rose by 1.4% compared to February and by 1.0% compared to the same period in 2017. Excluding tobacco products, prices in March rose by 1.0% and 1.2%, respectively.

Such data led to market talks about the further actions of the European Central Bank. A number of leading economists of large international banks have already begun to consider the likelihood that the ECB will announce in July this year that the program for the purchase of assets will be extended by a monthly volume of 15 billion euros by the end of this year. Also, the term of the program can be extended in the autumn of this year.

On Wednesday, the agency Eurostat also reported that in February production in construction fell by 0.5% compared to January and increased by 0.4% compared to the same period in 2017.

The British pound collapsed against the US dollar on Wednesday after it became known that inflation in the UK in March slowed significantly. According to a report by the National Bureau of Statistics, in March of this year, consumer prices in the UK increased by 2.5% compared to the same period in 2017, after growing 2.7% in February.

The main growth in the slowdown in prices was noted for clothing, alcohol and tobacco. Economists had expected that the annual inflation rate in March would remain unchanged.

Despite a sharp slowdown, inflation remains above the level of the Bank of England about 2%, which allows investors to expect a further increase in interest rates this year.