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5 Jan 2015
Further weakening Euro might lift inflation – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, notes that a ECB estimates a lift in inflation by 0.4/5 percentage points if the trade-weighted euro declines by 10%.
Key Quotes
“A further weakening of the euro will help to lift inflation in the coming years. The ECB estimates that a 10% decline in the trade-weighted euro will help lift inflation by 0.4/0.5 percentage points. The trade-weighted euro has already fallen by almost 7% since the March of last year.”
“The release of the latest euro-zone CPI report in the week ahead is expected to reveal that the annual rate of headline inflation moved into negative territory in December where it is expected to remain for some time in 2015 weighed down by the sharp ongoing decline in the price of crude oil.”
Key Quotes
“A further weakening of the euro will help to lift inflation in the coming years. The ECB estimates that a 10% decline in the trade-weighted euro will help lift inflation by 0.4/0.5 percentage points. The trade-weighted euro has already fallen by almost 7% since the March of last year.”
“The release of the latest euro-zone CPI report in the week ahead is expected to reveal that the annual rate of headline inflation moved into negative territory in December where it is expected to remain for some time in 2015 weighed down by the sharp ongoing decline in the price of crude oil.”