- EUR/USD stalls after inflation hits new milestone high
- As ECB seen as unlikely to respond with policy change
- Likely to wait patiently in 2022 for inflation to dissipate
- Lagging behind Fed, leaving EUR struggling for traction
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The Euro to Dollar exchange rate was unable to capitalise on data revealing a further increase in Eurozone price pressures at year-end but could benefit if the prospect of a more prolonged inflation overshoot was to impact the policy stance of the European Central Bank (ECB) in the months ahead.
Europe’s single currency was buoyant above the 1.13 handle on Friday but stalled in its climb after Eurostat data showed the Eurozone’s consumer price index rising to a new milestone high of five percent in December.
“Another slight tick up for eurozone inflation means that the highest rate since 1985 has now been reached,” says Bert Colijn, a senior Eurozone economist at ING.
“The…
