日本語
Español
中文
Русский 
- New York 23:51
- London 04:51
- Barcelona 05:51
- Tokyo 13:51
- Sydney 15:51
0
0
Inflation data in the spotlight
Tue, May 13 2008, 10:03 GMT
by Adam Narczewski
Higher than expected CPI inflation reading in the UK makes it less probable that the Bank of England will cut interest rates one more time this year.
In April, CPI inflation rose in the UK by 0.8% on a monthly and by 3.0% on a yearly basis, which is the highest level since March of 2007. The reading are much above forecasts of 0.5% and 2.6%. The published data confirms increasing inflation in the United Kingdom. Yesterday’s PPI report showed growing inflation by 1.4% on a monthly and 7.5% on a yearly basis. Producer’s prices in April increased the most since 1986.
The PPI and CPI publication confirm that the UK has a problem with inflation, which is now 1.0% over the limit established by the Bank of England (BOE). Such situation lowers the chances for another interest rate cut in the UK. Most analysts expected such move in June, forecasting that the BOE will lower interest rates by 25 basis to 4.75%. Now, that probability is low despite the slowing UK economy.
Inflation is still a danger to the global economy, as noted by the International Monetary Fund (IMF) last week. In a tough situation is the European Central Bank (ECB). The Euro zone’s economy is clearly slowing down due to its economic relationship to the American economy, but also due to a strong Euro. The common currency is strong as never, reaching 1.60 at the end of April. Recently, the American dollar rebounded mainly due to better news from the U.S economy and rebounding stock markets. Still, the European economy slowed down to a dangerous level, which probably an interest rate cut could change. At the same time, the Euro zone is experiencing inflationary pressures with the CPI increasing to over 3.0% (way above the 2.0% set by the ECB). What will the ECB do in the next couple of months? The monetary policy of the ECB can be directed by the inflation reports that are being published this week. We already know what the UK brought us, now we are waiting for tomorrow’s CPI publications from the U.S and and Thursday’s Euro zone’s CPI.
Published on Tue, May 13 2008, 10:04 GMT
X-Trade Brokers Dom Maklerski SA
| Robert.kosowski@xtb.pl; 00-876 Warszawa
http://www.xtb.com/ | Robert.kosowski@xtb.pl
Legal disclaimer and risk disclosure
X-Trade Brokers Dom Maklerski S.A. does not take responsibility for investment decisions made under the influence of the information published on this website. None of the published information can be treated as a recommendation, disposition, promise, or guarantee that the investor will achieve a profit or will minimize risk using the information published on this website. Transactions including investment instruments, especially derivatives using leverage, are in its nature speculative and can provide both profits and losses that can exceed the initial deposit engaged by the investor.Interested in forex trading? forex brokerage firms!
GET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2009 "FXstreet.com. The Forex Market" All Rights Reserved.