Investing.com - Consumer price inflation in the euro zone rose more than expected in May, adding to evidence that the European Central Bank's massive stimulus program was taking effect, official preliminary data showed on Tuesday.
In a report, Eurostat said consumer price inflation rose by a seasonally adjusted 0.3% last month, above expectations for a gain of 0.2% and following a flat reading in April.
The rate has now been below 1% for 19 straight months, well under the European Central Bank's target of near but just under 2%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs increased by a seasonally adjusted 0.9% in May, compared to forecasts for a 0.7% reading and up from 0.6% in April.
Looking at the main components of euro area inflation, services is expected to have the highest annual rate in May, followed by food, alcohol & tobacco, non-energy industrial goods and energy.
EUR/USD was trading at 1.0988 from around 1.0980 ahead of the release of the data, while EUR/GBP was at 0.7209 from 0.7205 earlier.
Meanwhile, European stock markets held on to sharp losses. The EURO STOXX 50 dropped 1%, Germany's DAX slumped 1.3%, France’s CAC 40 declined 1.1%, while London’s FTSE 100 shed 1%.