Investing.com - The euro was slightly lower against the dollar on Thursday after data showed that the annual rate of inflation in Germany slowed to almost a five year low this month, fuelling concerns over the risk of deflation in the euro area.
EUR/USD was down 0.22% to 1.2478, off session highs of 1.2522.
Germany’s consumer price index rose just 0.6% this month, data on Thursday showed, down from 0.8% in October. On a month-over-month basis, prices were flat.
The data was seen as increasing the likelihood that the European Central Bank will implement additional stimulus measures in an attempt to spur growth and inflation in the euro area.
Investors were looking ahead to preliminary data on euro zone inflation due to be released on Friday. The annual rate of inflation in the euro zone fell to 0.4% in October, well below the ECB’s target of close to but just under 2%.
ECB vice-president Vitor Constancio said Wednesday it could begin quantitative easing as soon as the first quarter of 2015.
The single currency was also lower against the yen, with EUR/JPY down 0.38% to 146.69.
Trade volumes were expected to remain light on Thursday, with U.S. markets closed for the Thanksgiving holiday.