The spike in eurozone inflation to 2.3pc last month has reduced speculation among analysts that the ECB will cut rates next month However, with US equities closing lower overnight, the euro remained strong against the dollar this morning. Analysts at Bank of Ireland also pointed out that the ECB is taking a longer term look at consumer prices, which still leaves the way clear for a rate reduction in early December
"Though [the data] showed the annual rate of euroland inflation accelerating further away from the top of the target range of 0-2pc, the ECB has indicated that it is looking beyond the short-term trend in prices to the medium outlook for inflation, which it thinks has improved," said Michael Crowley. "It looks, therefore, like a rate cut in December is still on the cards," he added The US Labour Department publishes its October inflation figures this afternoon, but rising consumer prices are not an issue of concern for the Federal Reserve. The headline figure is expected to rise 0.4pc and the core rate, which excludes food and energy prices, by 0.2pc.//www.fxcentre.com