Monthly Archives: July 2018

Pound Drops As U.K. Inflation Rises Less Than Forecast

The pound fell sharply against its major counterparts in the European session on Wednesday, after U.K. consumer inflation grew less than expected in June, reducing hopes for a rate hike from the Bank of England next month.

Data from the Office for National Statistics showed that consumer prices climbed 2.4 percent year-over-year in June, the same rate of increase as in the previous two months. Meanwhile, the inflation was expected to accelerate to 2.6 percent.

On a monthly basis, consumer prices remained flat in June versus the expected increase of 0.2 percent.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, eased to 1.9 percent in June from 2.1 percent in May.

Another report from the ONS showed that input price inflation quickened to 10.2 percent in June from 9.6 percent a month ago. Prices were expected to grow by 10.1 percent.

Meanwhile, monthly inflation eased notably to 0.2 percent from 3.3 percent in May. The expected increase was 0.4 percent.

Output price inflation edged up to 3.1 percent in June from 3.0 percent in the prior month. Month-on-month, output prices gained 0.1 percent from May, when it rose by 0.5 percent.

Meanwhile, European shares rose amid growth optimism after Federal Reserve Chairman Jerome Powell offered a positive outlook of the U.S. economy and reiterated the Fed’s plan for gradual rate increases.

The currency held steady against its major rivals in the Asian session, with the exception of the greenback.

The pound declined to 0.8924 against the euro, its lowest since March 9. On the downside, 0.91 is likely seen as the next support for the pound.

Final data from Eurostat showed that euro area annual inflation accelerated in June, exceeding the European Central Bank’s target of “below, but close to 2 percent”.

The annual inflation rate rose to 2 percent from 1.9 percent in May, in line with the flash estimate.

The pound fell to a 10-1/2-month low of 1.3010 against the dollar and a weekly low of 147.09 against the yen, reversing from its early highs of 1.3117 and 148.24, respectively. Next key support for the pound is likely seen around 1.28 against the greenback and 145.00 against the yen.

The U.K. currency dropped to near a 3-week low of 1.3030 against the franc, after having advanced to 1.3139 at 3:00 am ET. The pound is seen finding support around the 1.29 region.

Looking ahead, U.S. housing starts and building permits for June are scheduled for release in the New York session.

At 10:00 am ET, Federal Reserve Chairman Jerome Powell will testify on the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington DC.

The material has been provided by InstaForex Company – www.instaforex.com

Poland Industrial Production Grows More Than Forecast

Poland’s industrial production expanded at a faster-than-expected pace in June, figures from Statistics Poland showed Wednesday.

Industrial production advanced 6.8 percent year-over-year in June, exceeding economists’ forecast for an increase of 6.3 percent.

Among components, manufacturing production grew 6.5 percent annually in June and electricity and other utilities output registered a spike of 13.6 percent.

Data also showed that construction output logged a marked annual growth of 24.7 percent in June.

On a monthly basis, industrial production climbed 4.2 percent in June, above the expected rise of 3.5 percent.

Another report from the statistical office showed that industrial producer prices rose 3.7 percent annually in June, just above the 3.6 percent increase economists had forecast.

Month-on-month, producer prices went up 0.3 percent in June versus the expected gain of 0.5 percent.

The material has been provided by InstaForex Company – www.instaforex.com

Eurozone Construction Output Growth Improves For Third Month

Eurozone’s construction output growth improved for a third straight month, preliminary data from Eurostat showed Wednesday.

Construction output rose 1.8 percent year-on-year after a 1.2 percent increase in April. Output climbed for a third straight month after stagnation in February.

Civil engineering output grew 3.3 percent and building construction increased 1.3 percent.

On a month-on-month basis, construction output rose 0.3 percent in May after a 1.4 percent gain in April. Output increased for a second month in a row after declining for three months.

The material has been provided by InstaForex Company – www.instaforex.com

Gold Extends Losses As Powell Reinforces Rate Hike View

Gold prices fell on Wednesday to extend losses from the previous session as a bullish outlook from Federal Reserve Chairman Jerome Powell buoyed the dollar.

In testimony before the Senate Banking Committee, Powell on Tuesday offered a positive outlook of the U.S. economy and reiterated that gradually raising interest rates is “the best way forward.” He also downplayed potential negative fallout from the ongoing U.S.-China trade spat.

Powell returns to Capitol Hill today for a second day of testimony, with markets looking for his comments on the impact of trade tariffs.

Spot gold was down 0.21 percent at $1,223 an ounce after falling about 1 percent on Tuesday to hit its lowest level since last July. U.S. gold futures for August delivery were down 0.37 percent at $1,222.80 an ounce.

The dollar hit a six-month high against the yen while the pound dropped to its weakest level in 10 months after U.K. inflation data missed forecasts.

The U.K. consumer price index unexpectedly came in flat at 2.4 percent year-over-year last month, raising questions over whether the Bank of England will deliver an August rate hike.

The material has been provided by InstaForex Company – www.instaforex.com

Portugal PPI Inflation Accelerates In June

Portugal’s producer price inflation accelerated for the third straight month in June, figures from Statistics Portugal showed Wednesday.

Producer prices climbed 4.0 percent year-over-year in June, faster than the 3.2 percent rise in May.

Excluding energy, producer price inflation rose to 1.8 percent from 1.5 percent.

On a monthly basis, producer prices increased 0.6 percent from May, when it grew by 1.5 percent.

The material has been provided by InstaForex Company – www.instaforex.com

South Africa Inflation Accelerates Less Than Expected

South Africa’s consumer price inflation accelerated at a slower-than-expected pace in June, figures from Statistics South Africa showed Wednesday.

Consumer prices climbed 4.6 percent year-over-year in June, faster than the 4.4 percent increase in May. That was below the 4.8 percent rise economists had forecast.

Moreover, this was the strongest inflation in this year so far.

Prices of food and non-alcoholic beverages grew 3.4 percent annually in June and transport costs advanced by 7.3 percent.

On a monthly basis, consumer prices increased 0.4 percent in June versus the expected rise of 0.6 percent.

The material has been provided by InstaForex Company – www.instaforex.com

Oil Prices Fall On Surprise Inventory Build

Oil prices fell on Wednesday after data from the American Petroleum Institute showed an unexpected weekly rise in U.S. crude supplies during the week ended July 13, defying expectations for a big fall.

U.S. crude supplies rose by 629,000 barrels for the week while gasoline stocks rose by 425,000 barrels.

Brent futures for September delivery were down 58 cents or 0.79 percent at
$71.58 a barrel as investors awaited supply data from the Energy Information Administration later today. Crude oil WTI futures were down 38 cents or 0.57 percent at $66.78 a barrel.

Concerns about weak demand growth also weighed on the commodity. Federal Reserve Chairman Jerome Powell told the Senate Banking Committee at a hearing on Tuesday that a trade war with the rest of the world could complicate the Fed’s forecasts.

Kansas City Federal Reserve Bank President Esther George also cautioned that there are predominant downside risks coming from uncertainty around trade policy.

The material has been provided by InstaForex Company – www.instaforex.com