Germany annual CPI inflation softens to 2.3% in January vs. 2.6% expected

• Annual inflation in Germany softened unexpectedly in January.
• EUR/USD continues to trade in a tight range at around 1.0400.

Inflation in Germany, as measured by the change in the Consumer Price Index (CPI), softened to 2.3% on a yearly basis in January from 2.6% in December, Destatis' flash estimate showed on Friday. This reading came in above the market expectation of 2.6%.

On a monthly basis, the CPI declined by 0.2% after rising 0.1% in December.

The Harmonized Index of Consumer Prices in Germany, the European Central Bank's preferred gauge of inflation, increased 2.8% on a yearly basis, matching December's increase and the market consensus.

Market reaction

EUR/USD showed no immediate reaction to this report and was last seen trading marginally lower on the day at 1.0385.