Pound Slides As U.K. Consumer Inflation Falls To 20-Month Low
19 Dicembre 2018 - 7:27AM
RTTF2
The pound declined against its major counterparts in the
European session on Wednesday, after a data showed that UK consumer
price inflation slowed to its lowest level in twenty months in
November amid lower oil prices.
Data from the Office for National Statistics showed that the
consumer price index rose 2.3 percent year-on-year following a 2.4
percent increase in October. The latest inflation rate was the
lowest since March 2017, when inflation was at the same level.
On a month-on-month basis, the CPI edged up 0.2 percent in
November, matching economists' expectations.
Core inflation, which excludes prices of energy, food, alcoholic
beverages and tobacco, slowed to 1.8 from 1.9 percent in October.
The easing was in line with economists' expectations.
Separate data showed that input price inflation nearly halved to
5.6 percent in November from 10.3 percent in October. Economists
had expected a lower figure of 4.9 percent.
Output price inflation slowed to 3.1 percent from 3.3 percent,
slightly above economists' prediction of 3 percent.
Another data showed that house price inflation eased to 2.7
percent from 3 percent in September. The latest increase was the
smallest since July 2013, when prices rose at the same pace.
London house prices fell 1.7 percent in the year to October
after a 1.8 percent drop in the year to September.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the franc and the greenback,
it held steady against the yen and the euro.
The pound weakened to a weekly low of 0.9018 against the euro,
from a high of 0.8982 touched at 5:15 pm ET. The pound is seen
finding resistance around the 0.92 level.
Data from the Federal Statistical Office showed that Germany's
producer price inflation remained at its highest level in 19 months
in November.
Producer prices rose 3.3 percent year-on-year in November, same
as in October. Economists had expected a 3.1 percent increase. The
pace of increase was the fastest since April 2017, when producer
prices rose at the same rate. The pound, having advanced to 1.2679
against the greenback at 2:45 am ET, reversed direction and moved
down to 1.2643. Next key resistance for the pound is seen around
the 1.24 mark.
After rising to 142.54 against the yen at 8:30 pm ET, the pound
pulled back to 142.00. The pound is likely to find resistance
around the 139.00 level.
Data from the Ministry of Finance showed that Japan recorded a
merchandise trade deficit of 737.3 billion yen in November.
That missed forecasts for a deficit of 630.0 billion yen
following the 450.1 billion yen shortfall in October.
Although the pound fell back to 1.2536 against the franc
following the data, the move was short lived with the pair bouncing
off to 1.2574. If the pound rises further, 1.28 is possibly seen as
its next resistance level.
Looking ahead, Canada CPI and U.S. existing home sales for
November are set for release in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate.
The central bank is expected to raise its interest rate by a
quarter-point to a range of 2.25 percent to 2.5 percent.
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