13th April 2011
Good morning. A surprise fall in inflation yesterday means there is little chance of a UK interest rate hike any time soon. The figures pushed Sterling to a 6 month low vs the Euro, and very close to the lowest in a year. At 08:30am this morning rates are as follows:
- GBP/EUR 1.1218
- GBP/USD 1.6274
- GBP/AUD 1.5500
- GBP/NZD 2.0594
- GBP/CAD 1.5633
- GBP/CHF 1.4601
- GBP/ZAR 10.923
- GBP/JPY 136.75
- GBP/HUF 298.64
- GBP/NOK 8.8457
- EUR/USD 1.4505
Inflation figures push Sterling to near 1 year low vs Euro
The Consumer Price Index (CPI) figures released yesterday showed a fall in inflation for the first time in 8 months. The fall in food and soft drink prices was the main cause. Lower inflation means that initial expectations of a rate hike in the UK have now been pushed back to November.
The news weakened Sterling and after the figures were released at 09:30am the Pound immediately fell and now sits at close to a 1 year low vs the Euro.
A survey also showed the biggest drop in retail sales in nearly 6 years, highlighting the problems facing the UK as the government’s tough austerity measures hit consumer spending, and jobs data on Wednesday will also be closely watched.
“The economic data that we’ve had out of the UK this morning gave a lot of ammunition to sterling bears,” said Audrey Childe-Freeman, EMEA head of currency strategy at JP Morgan Private Bank.
“Lower-than-expected inflation, weaker growth, that