Euro Rallies on Elevated Inflation Data
June 16, 2008
May’s final annualized headline release of Eurozone HICP inflation revealed a record high of 3.7%. Core inflation, a figure excluding food, energy, alcohol and tobacco was also up from 1.6% to 1.7%. Despite the significant rally in inflationary pressure being driven by the volatile food, energy and transport sectors, the ECB are largely expected to rise rates at their next meeting as the ECB continues to focus on the headline inflation number. With the heightened expectation of a near term rate hike the Euro rallied more than 1.0% against the US dollar.