- Consumer price inflation in Germany slowed unexpectedly in January, fuelling fears over the risk of deflation in the euro area, official preliminary data showed on Thursday.

In a report, the German Federal Statistics Bureau said consumer price inflation accelerated at an annualized rate of 1.3% this month, from 1.4% in December. Analysts had expected German consumer prices to rise by 1.5% in January.

Month-over-month, German consumer prices fell 0.6% this month, compared to forecasts for a 0.4% decline, after rising 0.4% in the preceding month.

Following the release of the data, the euro was lower against the U.S. dollar, with EUR/USD shedding 0.64% to trade at 1.3576, compared to 1.3590 ahead of the data.

Meanwhile, European stock markets held on to losses. Germany''s DAX slumped 0.2%, the EURO STOXX 50 fell 0.2%, France’s CAC 40 inched down 0.25%, while London’s FTSE 100 dipped 0.2%.

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