Eurozone annual HICP inflation softens to 2.2% in August as expected

• Annual core HICP inflation in Eurozone edged lower to 2.8%.
• EUR/USD continues to trade in a narrow channel below 1.1100.

The Harmonized Index of Consumer Prices (HICP), the European Central Bank's (ECB) preferred gauge of inflation, rose 2.2% on a yearly basis in August's flash estimate, Eurostat reported on Friday. This reading followed the 2.6% increase recorded in July and matched the market expectation. On a monthly basis, the HICP rose 0.2% after staying unchanged in July.

The core HICP, which excludes prices of volatile items such as food and energy, increased 0.3% on a monthly basis in August and rose 2.8% annually. Both of these prints came in line with analysts' estimate. 

Market reaction

These numbers failed to trigger a noticeable reaction in the Euro. At the time of press, EUR/USD was virtually unchanged on the day at 1.1080.