The euro pared its yesterday’s gains today after the preliminary report showed that inflation in the eurozone slowed and the outcome of the German debt auction wasn’t very good.

Eurozone annual inflation is expected to be 2.8 percent in December 2011 according to the flash estimate issued by Eurostat (the statistical office of the European Union). Demand for German 10-year bonds was lower than the average for the last five years. Economists are concerned that the negative signals may prompt the European Central Bank to lower interest rates.

EUR/USD slumped from 1.3048 to 1.2929 and EUR/JPY tumbled from 100.12 to 99.25 as of 15:24 GMT today.

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