Euro zone inflation rose to 2.4% in December, meeting expectations

Annual inflation in the euro zone rose for a third straight month to reach 2.4% in December, statistics agency Eurostat said Tuesday.

The preliminary reading was in line with the forecast of economists polled by Reuters and marked an increase from a revised 2.2% print in November. Core inflation held at 2.7% for a fourth straight month, also meeting economists' expectations, while services inflation nudged up to 4% from 3.9%.

Headline inflation was widely expected to accelerate after hitting a low of 1.7% in September, as base effects from lower energy prices fade. The full extent of increases in the reading — along with persistence in services and core inflation — will be closely watched by the European Central Bank, which markets currently expect to cut interest rates from 3% to 2% across several trims this year.

The pace of price rises in the euro zone's largest economy, Germany, hit a higher-than-expected 2.8% in December, according to figures published separately this week. Inflation in France meanwhile came in at 1.8% last month, below a Reuters analyst poll forecasting a 1.9% print.

The euro held early-morning gains against the U.S. dollar following the print, trading 0.33% higher at $1.0424 at 10:43 a.m. in London. Traders are assessing whether the euro could decline to parity with the greenback this year, if the U.S. Federal Reserve proves significantly more hawkish than the ECB.

Haig Bathgate, director of Callanish Capital, told CNBC's "Squawk Box Europe" that ECB policymakers would not be overly concerned by a hotter monthly inflation reading, as long as it was broadly in line with expectations.

"There's now a lot more predictability in a lot of the data series we're seeing... the direction of travel of rates