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The British Pound fell on annual inflation report, which showed its lowest level in four years

December 18, 2013, Wednesday, 10:00 GMT | 05:00 EST | 14:30 IST | 17:00 SGT
Contributed by Forex-Metal

Asian and European trading sessions:

Euro: The euro fell against the dollar after failing to keep the conquered positions early in the session. The published data on inflation in the euro zone, revealed that consumer prices in the euro zone fell in November compared to October due to lower energy prices and labor costs. Despite the decline in prices in November compared with October, the annual inflation rate rose to 0.9 % from 0.7%, according to a preliminary estimate. However, even after this increase the inflation remained far below the target level of the European Central Bank 2.0% and the slowdown in labor costs indicated that in the coming months a significant growth is unlikely. One more report showed that the economic expectations for Germany improved by 7.4 points in December 2013. The ZEW indicator of economic sentiment in Germany now stands at 62.0 points (historical average: 24.2 points). This is the best result of the indicator since April 2006. The EUR / USD pair rose to $ 1.3785 and then fell to $ 1.3745 during the European session.

British Pound: The pound fell against the dollar, retreating from highs. Annual inflation in the UK fell in November to its lowest level in four years, official data showed. Deceleration must persuade the Bank of England to keep interest rates at a record low until unemployment falls. Office for National Statistics reported that the annual inflation rate fell to 2.1% in November from 2.2% in October, with at least November 2009. The decline was due to falling prices for utilities and food, which grew more slowly than in the previous year.

The UK inflation fell from 5.2% y / y in September 2011 to nearly 2% of the target level of the Bank of England in November 2013. The Central Bank predicted that the annual inflation rate is likely to rise in the short term, and then fall below 2% in early 2015 .The GBP / USD pair rose to $ 1.6340, and then fell to $ 1.6260 during the European session.

American trading session:

U.S. Dollar: The dollar has risen considerably, reaching almost a session high as market participants' attention more and more switched to the announcement of the Fed meeting. It would be the last meeting for Fed chairman Bernanke in this post - in the next month, he will give his powers Janet Yellen. The markets expected the Fed may decide to small decrease in monthly program to purchase assets, which currently stands at $ 85 billion per month. Also, as it became known, the U.S. current account deficit, which was the sum of the balance of trade in goods and services, income, and net unilateral transfers, declined in the third quarter to 94.8 billion compared with the revised downwards from 98.9 to 96, $ 6 billion deficit in the second quarter. The deficit decreased to 2.2 % of GDP, compared to 2.3% of GDP in the second quarter.

Canadian dollar: The Canadian dollar declined significantly against the U.S. dollar, responding thus to the U.S. balance of payments data.

Gold: The gold prices fell significantly today, while offsetting the previous session’s growth, due to the expectations of the Fed meeting announcement. The cost of February gold futures dropped to $ 1229.60 per ounce on the COMEX today.

Oil: The prices of WTI crude oil has remained almost unchanged, amid fears that the U.S. Federal Reserve may loosen its monetary stimulus program, as well as expectations that U.S. crude inventories declined for the previous weeks. The cost of WTI January futures fell to $ 97.30 per barrel on the New York Mercantile Exchange.