Germany’s Bundesbank said Tuesday that it expects economic growth to be stronger in the second quarter of this year, but said that the weak economic situation in the eurozone remains a “significant” risk to the economy with EUR/USD hitting 1.2933 the session high, the pair subsequently consolidated at 1.2847, shedding 0.28.
Producer price inflation in Poland fell more-than-expected last month, industry data showed on Tuesday. PPI fell to a seasonally adjusted -2.00%, from -0.60% in the preceding month, Analysts had expected a fall to -1.50% last month and less than one third of the population is currently in favour of replacing the zloty with the euro. GBP/PLN trading at 4.890.
USD/JPY After being stuck in a 15 pip range for most of the day fell down towards levels of 102.50. Earlier on Tuesday Japans economic minister Akira Amari told reporters that he hopes the yen settles at a level that is in line with the country’s economic fundamentals and that the currency market finds a balance between the impact on imports and exports. GBP/JPY now trading at 1.5540.
The Swiss franc is seeing some moves as EUR/CHF trades up through 1.2500, USD/CHF trading solidly through 0.9700 to 0.9751 and GBP/CHF up from 1.4680 to 1.4742 now trading at 1.4687.
In UAE the Monster Employment index reflected a cautious approach by Middle East employers owing to the business scenario globally. All major industry sectors across Middle East have shown a decline in the hiring activity. GBP/AED currently trading at 5.5621.
The pound fell to seven week lows against the dollar on Tuesday after official data showed that consumer inflation in the UK fell for the first time since September last month. GBP/EUR fell from 1.1835 to a session low of 1.1727.
The Office for National Statistics said UK consumer inflation slowed to an annual rate of 2.4% in April from 2.8% the previous month. It was the first fall since September and was below expectations for a reading of 2.6%. Core CPI slowed to 2.0% from 2.4% in March analysts expected 2.3%.
Markets were awaiting any indication that the U.S. central bank will begin to scale back its asset purchase program this year after recent U.S. economic data bolstered optimism over the economic recovery. GBP/USD trading to lows of 1.5107 during the afternoon, levels not seen since April 4th the pair subsequently consolidated at 1.5163.
The ONS said lower petrol and diesel costs accounted for almost half the drop in the annual rate of inflation. The drop in inflation will give incoming Bank of England governor Mark Carney more leeway to implement policy measures to bolster the UK economic recovery.
This morning UK retail sales for april have seen a decline to -1.3% from -0.6% the previous month, these are the worst figures we have seen since April 2012. Analysts expected a flat 0% figure, GBP has fallen across the board notably to 1.5075 USD and 1.1657 EUR.
The Bank of England’s top policymakers remained split 6-3 against restarting its bond purchase programme for a fourth month in a row in May, amid signs that the economy is improving. As widely expected, BoE Governor Mervyn King was outvoted in his penultimate monetary policymeeting before retiring, when he called again for an extra 25 billion pounds of asset purchases.