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The dollar fell after U.S. data on consumer price inflation

April 16, 2014, Wednesday, 10:57 GMT | 05:57 EST | 14:27 IST | 16:57 SGT
Contributed by Forex-Metal

Asian and European trading sessions:

Euro: Euro fell amid weak data on Germany. Note that confidence among German investors fell again in April, extending this streak to four consecutive months, highlighting risks to recovery in Europe's largest economy. This was stated in the report of the Centre for European Economic Research ZEW.

According to the data, the April index of sentiment in the business environment, which is designed to assess the development of the economic situation in the next six months, declined to 43.2 from 46.6 in March. Economists had forecast a decline to 46.3. Current situation index rose to 59.5, its highest level since July 2011, compared with 51.3 in March. Economists predicted the figure at 51.5.

The data also showed that the index of economic sentiment in the euro zone fell to 61.2 from 61.5 in March, while the current conditions index rose 6.2 points to -30.5. The EUR / USD pair dropped to $ 1.378 7 during the European session.

British Pound: Pound rebounded from lows against the dollar, reaching levels with today's opening session, which was associated with the release of data on Britain. As it became known, at the end of March the British inflation fell to its lowest level in more than four years, retreating further from the target goal of the Bank of England. It became known from the report, which was submitted by the Office for National Statistics.

According to the data, consumer prices rose in March by 1.6 percent per annum, and confirmed the experts' forecasts, but were close to the lowest level since October 2009. Recall that in February, prices rose 1.7 percent in February. In the ONS said that the greatest pressure on the annual rate of consumer price inflation was the reduction in fuel prices, clothing and furniture. In addition, it was announced that the base rate of inflation, which excludes prices of energy, food, alcohol and tobacco increased by 1.6 percent (four-year minimum). The data also showed that inflation in selling prices increased by 0.5 percent (the lowest since October 2009), which was slightly higher than economists' forecasts - at the level of 0.3 percent.

The GBP / USD pair fell to $ 1.6684, but then recovered to $ 1.6720: during the European session.

American trading session:

U.S. Dollar: The dollar fell after U.S. data on consumer price inflation. A key measure of inflation rose marginally in the last month, although price pressures remained subdued amid weak growth in the U.S. and abroad. Report from the Labor Department showed that the March consumer price index rose a seasonally adjusted 0.2 % compared with 0.1 % the previous month. Many experts predicted an increase in this index is only 0.1 %.

Core CPI, which excludes food and energy, also rose 0.2 % after increasing by 0.1 % in February. It was  expected to grow by 0.1%. Compared to last year consumer price inflation accelerated in March to 1.5% from 1.1 % in February, although it remained below the 2 per cent target Fed.

The data also showed that the drop in energy prices helped to keep inflation pressures subdued in March. Gasoline prices decreased by 1.7 %, which is likely a result of the burst of domestic production of oil and increasing demand. Food prices, on the other hand, rose by 0.4 %, as the drought in some areas of the U.S. and Brazil raised the cost of agricultural products.

Gold: Gold prices significantly reduced against the publication of statistics on inflation in the UK and the U.S., as well as Trade Balance from euro zone. The cost of the June gold futures dropped to $ 1284.45 per ounce on the COMEX today.

Oil: The cost of WTI crude oil recovered losses in trading in New York pending inventory report from the U.S. Department of Energy. May futures for U.S. light crude oil WTI dropped to $ 102.90 and then rose to $ 104.06 per barrel on the NYMEX.