Euro area HICP inflation declines sharply to 4.3% in September vs. 4.5% expected

• HICP inflation in the Eurozone fell at a stronger pace than expected in September.
• EUR/USD clings to daily gains at around 1.0600.

Inflation in the Eurozone, as measured by the change in the Harmonzied Index of Consumer Prices, declined to 4.3% on a yearly basis in September from 5.2% in August. This reading came in below the market expectation of 4.5%. On a monthly basis, the HICP rose 0.3%, compared to the 0.5% increase recorded in August.

The annual Core HICP inflation, which excludes the prices of volatile items such as food and energy, fell to 4.5% from 5.3% in the same period.

Market reaction

The Euro preserves its strength despite soft inflation data from the Euro area. As of writing, EUR/USD was up 0.45% on the day at 1.0605.