17th May 2017-UK consumer prices rose 0.5% in April with the year-on-year inflation rate increasing to 2.7% from 2.3%

 

     

UK consumer prices rose 0.5% in April with the year-on-year inflation rate increasing to 2.7% from 2.3%

US construction data was weaker than expected with building permits declining 2.6% for April to an annual rate of 1.23mn while housing starts declined to a five-month low of 1.17mn. Futures markets indicated that the chances of a June Fed rate hike had dipped to just below 70% on wider economic doubts following recent data.


US political factors triggered another slide in the dollar during the Asian session on Wednesday. There were reports from a leaked memo written by former FBI Director Comey that President Trump had asked for the investigation into his original National Security advisor Flynn to be stopped. There was a fresh loss of confidence in the Administration and fears over the economic-reform prospects.

The dollar declined sharply against the yen as equity futures retreated while the dollar index dipped to fresh six-month lows below 98.00.  The dollar index lost all the gains seen since Trump’s election victory as economic and political fears sapped support.

UK consumer prices rose 0.5% in April with the year-on-year inflation rate increasing to 2.7% from 2.3%. The rate compared with consensus expectations of 2.6% and was the highest rate since June 2013. There was also a sharp increase in core inflation to 2.4% from 1.8% previously as transport prices were pushed higher by the late Easter.

Producer output prices rose 3.6% in the year to April with the rate unchanged from the previous month.

Markets had priced in a strong figure ahead of the release and a Sterling spike on release was reversed quickly with the UK currency dipping into negative territory.

GBP/USD dipped to lows near 1.2870 before recovering ground while GBP/EUR fell to a six-week low at 1.1605 level. Dollar weakness dominated on Wednesday, but with GBP/USD hitting further selling near 1.2950. 

     
 
       
 

GBP/EUR 

– 1.1617

 
 

GBP/USD 

– 1.2915

 
 

GBP/CHF 

– 1.2688

 
 

GBP/JPY 

– 145.09

 
 

GBP/AUD 

– 1.7377

 
 

GBP/NZD 

– 1.8671

 
 

GBP/CAD 

– 1.7556

 
 

GBP/ZAR 

– 16.9127

 
 

GBP/NOK 

– 10.9085

 
 

GBP/SEK 

– 11.3160

 
 

EUR/USD 

– 1.1116

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR 

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

09:30 GBP

UK Average Earning Including Bonus

-

2.30%

 
   

09:30 GBP

UK Unemployment Rate

-

4.70%

 
   

10:00 EUR

Euro-Zone CPI 

1.90%

1.90%

 
   

15:30 USD

US Crude Oil Inventories

-

-5.2M

 
 
   
 
 
*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time.  CentralFX are not responsible for the rates shown.
 
 
 

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