German HICP inflation rebounded to 2.8% in July, reversing a downward trend and weighing on the Euro amid rising energy costs.
EUR/USD extended losses for a third day, trading near 1.1540 in European hours as German inflation surged to 2.8% in July. The rebound followed a decline to 2.3% in June, driven by accelerating energy prices, according to official data.
The increase reverses a months-long easing trend, with inflation previously cooling from 2.9% in April to 2.6% in May. Energy costs were cited as the primary catalyst for the uptick, raising concerns about persistent price pressures in the Eurozone.
Despite stronger-than-expected Eurozone Q2 GDP growth of 0.4%, the Euro remained under pressure as investors assessed the impact of higher inflation and geopolitical risks. The US Dollar gained on safe-haven demand amid Middle East tensions.