- Peter Praet, ECB
Producer prices in the Euro zone dropped at a faster than expected pace in August, after rising for three consecutive months, official figures revealed on Tuesday. According to the European Union's statistics agency Eurostat, the Producer Price Index for the region fell 0.2% on a monthly basis in August, compared to the preceding month's upwardly revised 0.3% gain, while market analysts expected producer prices to increase 0.1% in the reported month. On an annual basis, the PPI declined 2.1% in the same month, slightly up from the upwardly revised fall of 2.6% and in line with analysts' expectations. The August disappointing data confirmed that inflation pressures in the Euro zone remain weak. The drop was mainly driven by low energy prices, which fell 0.8% month-over-month in August. However, excluding energy prices, the PPI remained stable in the eight month of the year. Economists widely expect consumer prices to rise sharply in the final months of 2016 and in the early part of 2017.
After the release, the Euro was seen trading at 0.8746 against the British Pound, 1.0932 against the Swiss Franc, 1.1172 against the US Dollar and 114.31 against the Japanese Yen.
© Dukascopy Bank SA