• CPI Inflation in Germany continued to soften in November.
• EUR/USD remained around 1.0980 with the immediate reaction.

Inflation in Germany, as measured by the change in the Consumer Price Index (CPI), declined to 3.2% on a yearly basis in November from 3.8% in October. This reading came in below the market expectation of 3.5% and was the lowest level since June 2021. On a monthly basis, the CPI dropped 0.4%.

The annual Harmonised Index of Consumer Prices (HICP), the European Central Bank's (ECB) preferred gauge of inflation, rose 2.3% in the same period, compared to 3.0% in October and the market forecast of 2.7%. Monthly HICP decreased 0.7%.

Market reaction

The EUR/USD held steady around 1.0980, posting modest losses for the day. The reaction was limited as regional German and Spanish data was already pointing to a slowdown larger than expected.