Weekly Economic Review

The British pound remained out of favor with investors last week. On the background of the risks of the UK is getting out of the European Union, the activity of the sellers remained, and published macroeconomic statistics for the UK was unable to provide support for it. Consumer inflation, as well as the producer price index, remained at a low level, which does not give any reasons to expect an increase by the Bank of England of interest rate in the foreseeable future. On stronger than was expected data on retail sales was an attempt of the pound to increase against a number of competitors, but the deflator ofretail prices for the last month, decreased in annual basis, and it cooled off the ardor of bulls.

At the end of the week it was reported that British Prime Minister reached an agreement with the EU, and on favorable terms for the UK. On this background, the pound ended the week with the growth in the area of the 44th figure, but with the start of trading after the weekend was again sold. The reason for the sale was the news that the Mayor of London, which enjoys popularity among Brits, will play for the country's exit from the EU. Thus, the pressure on the pound this week may continue, but the fact that according to results of polls, most Brits are still opposed to the country's exit from the EU, will limit the potential for reducing of the pound.

One of the important events of the last week was the publication of the consumer inflation data in the US. These data exceed the estimates, showing some acceleration in inflationary pressure, but to return the demand for the US dollar against the Japanese yen, these data have failed. Under the conditions of falling stock indexes, the pair finished the week down to the support in the area of 112.30, that indicates the continuing high risks of testing the lows at 110.98. However, IAFT traders are should note that the growth of oil prices will support the stock market, and this, in turn, will help the dollar/yen to restore. IAFT Traders

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International Association of Forex Traders
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