Eurozone annual HICP inflation eases to 2.2% in August, in line with expectations

• Annual core HICP inflation in the euro area fell to 2.8%.
• EUR/USD continues to trade in a narrow channel below 1.1100.

The harmonized index of consumer prices (HICP), the European Central Bank’s (ECB) preferred inflation gauge, rose by 2.2% annually in the August flash estimate, Eurostat reported on Friday. This reading followed the 2.6% increase recorded in July and matched market expectations. On a monthly basis, the HICP rose 0.2% after being flat in July.

The core HICP, which excludes prices of volatile items such as food and energy, rose 0.3 percent monthly in August and rose 2.8 percent annually. Both prints were in line with analysts’ estimates.

Market reaction

These figures failed to trigger a noticeable reaction in the euro. At press time, EUR/USD was virtually unchanged on the day at 1.1080.