German inflation rose to 3.7% in December, up from the prior 3.2% in November. The HICP measure rose to 3.8%, up from 2.3% in November. The rise in the data was preceded by numerous warnings by prominent ECB officials that it is way too early to be talking about rate cuts and that interest rates are required to remain restrictive for as long as is necessary.
EUR/USD trades sharply lower this morning on what appears to be a response to a lift in US yields attempting to arrest the recent decline. US yields have been dropping day after day, providing EUR/USD bulls with support.
