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The cost of the euro rose sharply against the dollar, updating the session high, which was associated with the statements by the Fed Bullard and Dudley. According to Bullard, the Federal Reserve should continue to buy bonds, but be ready to change their rates in accordance with the development of the economic situation. Bullard said that it is best if in the future the central bank will "continue to implement the current program of quantitative easing, adjusting the pace of purchases in accordance with the incoming data on the real economic growth of the real and inflation." Bullard said the program of unlimited central bank's purchase of Treasury bonds and mortgage-backed securities.
In his speech, Bullard considered options for further action, which will remain at the central bank when it is no longer able to change interest rates. Of all these "quantitative easing remains the best tool of monetary policy in this situation," he said.
The pound traded down against the dollar, which contributed to the data presented by the British. Note that the report from the National Bureau of Statistics (ONS) showed that the rate of consumer price inflation in the UK slowed in April, and the price pressure from manufacturers has gone down since the fall of oil prices affected the world economy. According to published reports, the annual growth rate of consumer price index (CPI) slowed in April to 2.4% from 2.8% in March. Thus, the annual inflation rate was the lowest since September 2012 and was below economists' forecast, which was 2.6%. Annual core inflation, which excludes volatile energy prices, food and drink, declined in April to 2%, the lowest level since November 2009. According to the ONS, the price of gasoline and diesel fuel declined in March compared with April, reflecting the falling price of a barrel of crude oil by 6.8% over the same period. Decreased and the cost of air travel.
Decline in oil prices also affected the British wholesale prices. UK producer prices rose in April by 1.1% compared to the same period last year. Thus, the annual growth rate of producer prices were the lowest since September 2009. Purchase prices for businesses to source materials, including oil, fell in April by 0.1% compared to the previous month and by 2.3% compared with the same period last year.
The Swiss franc fell against the euro after the International Monetary Fund said that the Swiss National Bank should continue to protect the minimum limit for the pair EUR / CHF at 1.20. Switzerland should not go back to a free floating exchange rate for as long as deflationary pressure and weaken "the economic recovery does not get stronger," the IMF said. Recall that the central bank of Switzerland introduced a threshold level for EUR / CHF pair in September 2011 in order to support exporters who have difficulties due to the strength of the franc. There was talk that the Swiss National Bank may raise the limit for couples to provoke a further weakening of the franc.
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