FXStreet (Mumbai) - Eurozone headline inflation increased to 0.4 per cent year on year in January, up from 0.2 per cent rise seen in December. Core inflation which excludes the more volatile food and energy prices grew 1.0 per cent year on year, up from 0.9 per cent growth seen previously. The European Central Bank (ECB) last week kept its monetary policy unchanged. Rates were held steady at 0.05 per cent and at the post meeting press conference ECB supremo Mario Draghi stated that rates can be expected to "stay at present or lower levels for an extended period of time". He held that there that downside risks were increasing again. He signalled the need for more stimulus measures and that monetary policy stance will be reassessed in its next meeting on the back of rising downside risks. He noted "It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in March". When it meets in March, the council will assess to what extent the oil slum has impacted core inflation. It will also assess how far its easing measures have been successful in supporting price rise in the bloc. Today’s data showed that core inflation has risen by 0.13 percentage points after having weakened for two months. Non-energy industrial goods as well as services saw an increase in inflation. In the non-energy industrial goods segment prices rose from 0.5 per cent to 0.7 per cent; while in services prices moved up to 1.2 per cent from 1.1 per cent. The movements are not exactly significantly large and inflation is still way below the 2 per cent inflation target set by the ECB. Never the less, the data does show that price environment is improving. Financial markets however are not very optimistic about seeing an inflation rise. Long-term inflation expectations are currently close to the January 2015 low of 1.48 per cent which was seen before the ECB had embarked on their asset purchase programme. It is too early to say whether today’s data will have any impact on the ECB’s decision making when the council meets in March given that several other indicators are slated to be released between now and the March meeting. As analysts at ING put it “they do not have to decide just yet based on today’s data: before the next 10 March ECB meeting, February monetary developments and inflation will be available as well, hopefully telling us more about those feared second-round effects.” Post the release of the data which showed CPI accelerating in January the Euro began trading slightly higher versus other major currencies. For more information, read our latest forex news.