Monthly inflation in the eurozone rose by more than expected in December, but the annual headline rate fell, lending weight to the European Central Bank's current monetary policy stance.
The euro fell in response as investors considered near-term policy change from the ECB unlikely in the wake of the inflation data.
Consumer price index (CPI)
The headline annual rate of consumer price inflation eased to 1.4% - down from 1.5% November and in line with market forecasts.
On a monthly basis, core consumer prices, which exclude volatile items such as food and energy, rose 0.5% in December, following a 0.1% decline in the previous month. Analysts had expected a month-on-month rise of 0.4%.
This was enough to keep the annual core rate 1.1%, versus expectations of a dip to 0.9%.
ECB policy settings
Growth in the eurozone continued to accelerate in the final quarter of 2017, according to survey evidence from purchasing managers and other sentiment measures. This sparked some criticisms of the ECB for retaining too dovish a policy stance.
Wednesday's figures appeared to offer some vindication of the central bank's decision to leave interest rates untouched - at least until its asset buying programme ends in September.
Jabob Deppe, head of trading at Infinox, agreed: "The ECB will want to be sure there is a secure government in place in Germany - the eurozone’s largest economy - and will want to see economic growth for the first quarter of 2018 first.
"ECB president Mario Draghi will calculate that some policy divergence with the US is tolerable in the meantime, as any further interest rate rises across the Atlantic seem unlikely before March at the earliest anyway."
While the US shares a similar economic situation - robust growth with low inflation - the Federal Reserve has been keener than the ECB to start the process of policy normalisation, or raising interest rates back towards historical averages.
The Fed's actions should have been supportive of the US dollar, yet other political and structural concerns have stifled any attempt by the US currency to mount a sustained rally.
Indeed, the euro has remained the stronger currency during the past 18 months or so, despite the Fed's four quarter-point rate hikes since December 2016, and the ECB fears that if it pulls the trigger on rates too soon, the euro could appreciate rapidly and damage the eurozone recovery.
Few believe it can hold off much longer, however. John Dolan at Fexco Corporate Payments said: "Mario Draghi may not have an inflationary imperative to dial down QE, but with the eurozone enjoying strong growth and falling unemployment, the ECB’s monetary stimulus is looking ever more anachronistic."
The data caused the euro to fall against the dollar, down 0.23% to $1.2233. Sterling was also higher against the euro, climbing 0.27% to €1.1279.
Most of Europe's stock indexes were lower, with the EuroStoxx 50 shedding 0.15% to 3,612.5.