Forex: EUR/GBP: UK inflation disappoints; German and Eurozone economic sentiment up

on Dec 17, 2013
Updated: Oct 21, 2019
Listen Tuesday, December 17th:_ The EUR/GBP yesterday continued the upwards movement from the 3 December low of 0.8250, reaching its highest point since 13 November at 0.8453. The pair gained 0.14 percent intraday, closing at 0.8441.

Initially today the price moved sluggishly within an eight-pip range but after the release of UK inflation data the volatility increased and a fresh intraday high and low were reached – with the low first at 0.8430 followed by the high at 0.8451. Currently the pair is changing hands at 0.8446.
The UK Consumer Prices Index y/y rose 2.1 percent in the year to November, down from 2.2 percent y/y in October. In reporting the latest data, the Office for National Statistics said: “The largest contributions to the fall in the rate came from food and the utilities (gas and electricity). These were partially offset by upward contributions from the transport sector and from some aspects of recreation & culture.”

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The Core CPI y/y, which excludes the more volatile food, energy, alcohol and tobacco items, grew by 1.8 percent in November, up on October’s 1.7 percent rise.
In the year to November, the manufacturers’ output Producer Price Index (factory gate prices) increased by 0.8 percent, matching October result. Month-on-month November factory gate prices dropped by 0.2 percent, compared with a fall of 0.3 percent between September and October.

The November year’s PPI core factory gate prices, excluding food, beverages, tobacco and petroleum products, grew by 0.7 percent, versus the 0.8 percent rise in the year to October. PPI input prices fell by one percent, compared with zero percent change in the October year. Total input prices month-on-month fell by 0.7 percent, as against the 0.4 percent drop between September and October.

The ZEW German Economic Sentiment Index for this month checked in today well up at 62 points from November’s 54.6.
ZEW president Dr. Clemens Fuest observes: “With respect to the year 2014, the surveyed financial market experts are quite optimistic. Despite rather disappointing economic data released recently, the financial market experts expect the economic development in Germany and the Eurozone to improve further in 2014.”

Eurozone CPI y/y rose 0.9 percent in November, matching October’s reading. Core CPI y/y was also up 0.9 percent, compared with October’s 0.8 percent increase.
ZEW’s Economic Sentiment Index for the Eurozone also climbed this month – to 68.3 from 60.2.
Bank of England governor Mark Carney is scheduled to appear before the House of Lords Economic Affairs Committee in London at 15.30 UTC today.
Today’s resistances: 0.8445, 0.8455 and 0.8475.
Today’s supports: 0.8435, 0.8425 and 0.8410.
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