Forex Weekly Round Up 12 October 2015 – 16 October 2015

A rise in car exports helped improve Britain’s trade deficit in August, with the monthly shortfall in the trade balance narrowed to £3.3bn from £4.4bn in July. However the UK was still heading for a huge deficit in the third quarter of the year after an upward revision to July’s shortfall.

China’s exports and imports fell in September, as global demand remained weak, signaling that the world’s second-largest economy continues to struggle into the end of the year. Exports dropped less than some economists had expected. Still, they said the data offered a further indication that China’s third-quarter growth figures set for release next week will likely fall below Beijing’s target of about 7% for the whole year.

Britain’s inflation rate returned to negative territory for only the second time since 1960, reflecting weak price pressures that the Bank of England has warned will persist into 2016. Consumer prices fell an annual 0.1% after stagnating in August. The ONS said that a smaller than usual rise in clothing prices, and falling motor fuel prices, were the main contributors to the drop in the rate. The CPI rate has been at zero or close to zero for most of this year. It was last in negative territory in April.

The US Consumer Price Index fell 0.2% last month after slipping 0.1% in August. In the 12 months through September, the CPI was unchanged for the first time in four months after rising 0.2% in August. Last month gasoline prices fell 9.0% – the biggest drop since January after declining 4.1% in August. Food prices increased 0.4%, the largest increase since May 2014.

Businesses and individuals looking to buy Dollars and sell Euros may benefit from a forward contract to hedge against adverse movements. Please contact us for your free, no obligation FX comparison.