Germany July import prices +0.2% vs -0.7% m/m prior
Germany's import prices rose 0.2% m/m in July, reversing a decline, and accelerated to 6.8% y/y. The data supports the ECB's hold stance, keeping EUR/USD steady.
Germany's import prices rose 0.2% in July from the previous month, Destatis reported on Friday. The reading reversed a 0.7% decline in June. On an annual basis, import prices climbed 6.8%, accelerating from 6.1% in the prior month.
Import prices are a leading indicator for consumer inflation. Rising costs for raw materials and intermediate goods feed through to producer and consumer prices. The July print points to persistent upstream price pressure even as the ECB has held its deposit rate at 3.25% since June.
The euro held near $1.1080 after the data, little changed. The move extended a steady tone that has kept EUR/USD in a tight range ahead of the Jackson Hole symposium. Federal Reserve Chair Warsh is scheduled to speak later, and traders are watching for any shift in the US policy outlook that could widen the rate differential.
The data reinforces the case for the ECB to keep rates on hold at its September meeting. A rate cut would require a clearer sign that inflation is returning to target. July's import price acceleration does not provide that.
The next eurozone inflation data is due in September.
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