Eurozone inflation remains unchanged at 2% in July

Inflation in the Eurozone remained unchanged at the ECB’s 2% target in July, coming just a tick above 1.9% forecast and confirming the bank’s softer view of prices outlook.

July’s numbers also add to the central bank’s stance to keep interest rates on hold for some time after halving its key rate to 2% during past year.

The notion is supported by policymakers’ prediction that inflation would hold near its target over the medium term and expecting that even increased uncertainty over US trade tariffs and volatile geopolitical situation won’t significantly destabilize inflation.

So-called core inflation, which excludes volatile food and energy components, was also steady at 2.3% and came in line with expectations in July.

The fact that the EU bloc have reached trade deal with the US and avoided the worst scenario of a trade war have eased pressure on the central bank to further ease monetary policy to support bloc’s economic growth.

Weaker Euro and insufficient but still positive Q2 GDP growth also contribute to such scenario, with market bets for another rate cut by the end of the year dropping below 50% after EU’s reached a trade deal with President Trump.