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Daily Review 14.09.2016

UK’s inflation shrugs off Brexit aftermath as rate holds steady

UK’s decision to leave European Union last June has yet to make prices in Great Britain surge unexpectedly as the inflation rate remained unchanged in August, the Office for National Statistics reported.

The annual rate of consumer price index (CPI) did not move and recorded an identical 0.6% last month, falling short of economist expectations of 0.7%, which kept the chances of another rate cut form the Bank of England later this year.

The cheaper prices of hotel rooms, clothing and wine offset the rising prices of food and air fares as core inflation figures tallied a flat reading of 1.3%.

Meanwhile, the retail prices index (RPI) that includes mortgage interest payment fell to 1.8% last month from 1.9% in July. The price of factory goods added 0.8% while manufactured materials and fuels climbed 7.6% in prices.

With the report, the pound sterling shed more than 1% against the dollar and euro and was last trading at 1.3169 and 1.1718 respectively while the FTSE futures dropped 0.53% and closed at 6 652.00.

Dollar strengthens as impact of Fed’s dovish comments looms

The US dollar had an impressive performance on forex trading in Tuesday as it stood atop against its major counterparts after the fears brought by a dovish remark from a top Federal Reserve official faded.

The dollar index, which measures the greenback against a basket of six currencies, finished 0.41% higher to close at 95.433, boosted by the investors’ anticipation on September 20-21 policy meeting.

The Japanese yen stretched its losses against the greenback as it shed 0.7% at 1012.62 after the Nikkei reported that the Bank of Japan would pursue negative rates.

The euro went down 0.11%, closing at 1.1223 while the Canadian dollar had fallen 1% and last closed at 1.3253.

Both Australian and New Zealand dollar touched a session low against the US dollar as they closed 0.7486 and 0.7271 respectively.

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