Investing.com - The euro fell to the lowest levels of the day on Tuesday after data showing that the annual rate of inflation in Germany fell to zero this month, adding to pressure on the European Central Bank to ramp up its stimulus program.
Germany’s Federal Statistics Office said the annual rate of inflation slowed to zero in September, worse than forecasts of 0.1%.
The German consumer price index fell 0.2% from a month earlier, compared to expectations for a decline of 0.1%.
The report came after data earlier on Tuesday showed that Spain’s consumer price index fell by an annualized 0.9% in September, the largest fall in seven months.
The weak inflation data fueled expectations that the ECB may expand its trillion euro quantitative easing program after the bank cut its forecasts for growth and inflation earlier this month.
The ECB launched its €60 billion-a-month asset purchase program in March to combat persistently low inflation in the euro area and it is set to run until at least September 2016.
EUR/USD was last at 1.1207, down from around 1.1227 ahead of the report.
The euro zone was due to release preliminary figures on inflation on Wednesday and the consensus expectation was for a flat reading after a positive reading of 0.1% in August.
The ECB targets inflation of close to but just under 2.0%.
The single currency was also lower against the yen and the Swiss franc, with EUR/JPY down 0.37% to 134.35 and EUR/CHF losing 0.42% to trade at 1.0899.
The euro index, which measures the single currency’s strength against a trade-weighted basket of currencies, slid 0.41% to 89.59.