THE TAKEAWAY: Euro-zone producer prices fell 0.2% in November -> PPI movement matches inflation -> Euro trading unaffected
The Euro-zone producer prices index fell 0.2% in November, which was as expected and lower than October’s 0.1% rise in producer prices. Producer prices were 2.1% higher than November 2011, according to Eurostat.
The lower PPI came in line with November’s inflation, which was reported at a two year low. The inflation rate remained at 2.1% according to an initial estimate for December. Lower inflation rates would make it easier to for the central bank to decide to cut its interest rate this month, which would be Euro negative.
The Euro did not significantly react to the drop in producer prices. The single currency has dropped slightly against the US Dollar since the week’s open in Forex markets. EURUSD is currently trading below 1.3050, and may see support by the key 1.3000 line. Resistance could be provided by a line around 1.3158, which has provided some resistance over the past few months.
EURUSD Daily: January 7, 2013