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Euro zone annual inflation rose to 3.6% in March, revised up from 3.5% estimated earlier, the Eurostat indicated today. Annual inflation increased from 3.3% recorded in February. Monthly inflation stood at 1% in March.

The data confirmed the fears of some the European Central Bank`s more hawkish members, who have maintained their inflation-fighting posture over the past few months in spite of calls from many quarters to slash interest rates in the face of growing economic weakness. Unlike central banks in the US and UK, the ECB has held steady on its 4 percent key lending rate, insisting that keeping inflation in check is the primary focus of policymakers.

The euro skyrocketed to 1.5966 against the US dollar, reaching its highest level since its inception in 1999. Versus the sterling, the euro reached an all-time high of .8076.

US inflation figures will be in focus for a second straight day. At 8:30 am ET, analysts expect the consumer price index to increase 0.3 percent, compared with February`s flat rate. Core CPI, which excludes food and energy prices, is expected to increase 0.2 percent from February`s flat rate.

On Tuesday, a report on wholesale price growth in March came in well above expectations, with significant increases in food and energy prices contributing to the faster than expected growth.