(eToro Blog) As Finance Ministers and Eurozone policymakers meet to discuss the options available to some of the Eurozone's fiscally troubled states, the common currency is finding support from the earlier release of higher than expected core inflation data. According to Eurostat, the Consumer Price Index was 2.8% last month, effectively unchanged from March's data which was upwardly revised to 2.8% from 2.7%.

Core inflation, however, rose to 1.8% for the period, as compared to the same period a year ago; a consensus of economists' had, meanwhile, expected core inflation to be unchanged at 1.5%.The increase in core inflation is likely to throw a monkey wrench into the discussions of Eurozone policymakers who had been hopeful that inflation could be contained without the need to hike interest rates. The ECB has consistently maintained that inflationary pressures were a temporary phenomenon and likely to soon revert. Now it appears that rising commodity and energy prices are having second-round effects.

While an increase in benchmark rates would result in debt repayments for Greece, Ireland and Portugal being that much more difficult to make, analysts expect that a July hike is the most likely outcome of next month's rate setting meeting.

For the here and now, however, Finance Ministers from the Eurozone are seen as likely to sign off on a loan package to bailout Portugal, even as Finland's agreement seemed unlikely. Also noteworthy on the meeting agenda will be consideration of a reduction in Ireland's interest rate which is a bone of contention for some member countries. They view the Irish government as having an unfair advantage because they refuse to modify their corporate tax structure. Greece's problems, too, loom largely on the agenda with the ministers discussing a new emergency bailout loan, even as most analysts believe restructuring of their existing debt is unavoidable.

Investors are viewing the data releases as good news, signaling that a rate hike to control inflationary pressures is more likely to occur sooner, rather than later. On the eToro trading floor, sentiment among investors of EUR/USD, last at 1.4213, favor selling over buying by a wide margin of 50 sellers to 7 buyers. For investors of EUR/CHF, last lower at 1.2544, sentiment is bullish in favor of buying by a margin of 6 buyers to 1 seller.

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