Fundamental Headlines
• NZDUSD – New Zealand food prices rose 0.3% in April, which was the lowest increase in eight months. Growth in the country has been slowing since the RBNZ raised their benchmark rate to an all-time high of 8.25% ,in order to slow rising inflation. The easing food prices will be welcomed news for the central bank, as the downside risks to growth become a concern, leading many to believe that the MPC may cut rates by year’s end. For more news and resources, visit our New Zealand Currency Room.
• GBPUSD – U.K. inflation increased to 3.0% in April from 2.5% the month prior-the biggest increase since 2002. The rate stands 0.1% from breaching the central bank’s upper limit, which requires Governor King to write a letter of explanation to Chancellor Darling. Food prices rose 5.8% as record wheat prices fed increases in Alcohol and Meat which increased 4.1% and 4.2% respectively. Energy costs also jumped 13.6% after a 12.0% increase in March, as oil prices continue to set new records. This will make it difficult for the BoE to cut rates a quarter point at their June meeting as expected. Discuss the topic and your trade ideas in the GBP/USD Forum.
• Financial Rebels With A Cause: AIG (link) – Wall Street Journal
• Brazil Joins Front Rank Of New Economic Powers (link) – Wall Street Journal
• IEA Says Oil Market Supply is Adequate (link) – Financial Times
• Libor Poised For Shakeup As Credibility Is Doubted (link) – Bloomberg
• U.K. April Inflation Rates Jumps The Most Since 2002 (link) – Bloomberg
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