German inflation likely to rise 2 pct in January, says Bundesbank

German consumer inflation is expected to increase to the European Central Bank's (ECB) target of 2 percent in January for the first time since 2014 following past gains in crude prices, said the Bundesbank in its monthly report.

Germany's relatively quick inflation pick up has increased calls on the ECB to scale back its extensive stimulus measures as real savings rates turn negative and fear mount that the bank would now overshoot its target of close to but below 2 percent, Reuters reported.

"Due to a considerable increase in the daily average prices of oil products, the (inflation) rate could well reach 2 percent in January," the Bundesbank said in its monthly report.

Eurozone December inflation remained around 1.1 percent and for Germany, it was at 1.7 percent. This was relatively better as compared to other Eurozone members like, Cyprus, Ireland, Italy and Greece, where inflation remained either negative or near zero.

The ECB has agreed to scale back its monthly bond purchases by a quarter from April but also extended the programme until the end of 2017. An ECB survey last week also showed that underlying inflation, a key indicator watched by rate setters, will remain weak for the years to come, suggesting that the ECB is still far away from reducing its unprecedented stimulus measures, Reuters reported.

Meanwhile, the German stock index DAX Index traded 0.90 percent down at 11,525 by 08:55 GMT, while at 8:00 GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bullish at 76.68 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex