Key Highlights
- UK consumer price index was one of the major releases during the London session, which registered an increase of 1.2% in the year to September 2014, which was less than market’s expectation.
- UK Producer Price Index was also released around the same time, which declined by 0.4% in the year to September.
- UK Retail Price Index released also missed the mark and registered an increase of 0.2% in September 2014, compared to the forecast of 0.3%.
- German ZEW economic sentiment was also published, which dived more than expected and registered a negative reading of -3.6.
- Both EURUSD and GBPUSD pairs were seen trading lower, as the economic releases weighed on the minds of traders.
UK Consumer Price Index
Earlier during the London session, the UK consumer price index was released by the National Statistics. The market was expecting the UK consumer price index to register an increase of 0.2% in September 2014, compared to the last time increase of 0.4% (MoM). The outcome was not as expected, as the UK CPI was unchanged in September 2014 on a month-over-month basis. In terms of the yearly change, the UK CPI grew by 1.2% in the year to September 2014, compared to the same month of the last year. The forecast was of a 1.4% gain.
Similarly, the UK core consumer price index missed the market’s expectation. The UK core CPI grew by 1.5% in the year to September 2014, compared to the same month of the last year. The forecast was of a 1.8% rise. There were some other releases as well, including the UK Producer Price Index. The UK output price index for goods produced declined by 0.4% in the year to September, compared with a fall of 0.3% in the year to August. The output figures were mostly as expected, but the UK input prices declined by 0.6% between August and September 2014. This was on the disappointing side, as the market as expecting an increase of 0.2%.
The British pound was totally decimated by the outcome, as it dived below the 1.6000 support area against the US dollar. It also declined heavily against the Swiss franc and the Euro. The EURGBP pair managed to climb towards the 0.7950 level. The GBPUSD pair traded as low as 1.5940 as of writing, and it looks like set for a test of the 1.5920-10 levels. Let us see whether the pair can manage to find buyers around the mentioned area or not.
German ZEW Economic Sentiment
There was one more release lined up during the London session i.e. the German ZEW economic sentiment was released. The market was expecting it to fall from 6.9 to 1.0. However, the outcome was even more disappointing, as the German ZEW economic sentiment fell to -3.6.
The EURUSD pair moved lower after the release and traded towards the 1.2640 support area. It managed to hold the mentioned level, but there is no denial of more losses in the near term.
Oliver Miller
"Patience is the key for success"
Oliver Miller is one of the best financial analyst with 18 years of online trading experience
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