Forex Weekly Round Up 20 July 2015 – 24 July 2015

The US Consumer Price Index rose 0.3% last month after increasing 0.4% in May. Last month’s increase pushed the year-on-year CPI rate into positive territory for the first time since December.

Greece reopened its banks this week and ordered billions of euros owed to international creditors to be repaid on Monday in the first signs of a return to a normal way of life. Increases in value added tax agreed under the bailout terms also took effect, with VAT on processed food and public transport jumping to 23% from 13%.

UK government borrowing fell to £9.4bn in June, down £0.8bn from a year earlier, as income and corporation tax receipts rose to record levels. Income tax receipts rose to £11.5bn, while corporation tax brought in £1.7bn, both record monthly highs. It was lowest borrowing figure for June since 2008; however, analysts had been expecting it to drop further to £8.5bn.

In the financial year so far, borrowing has fallen by £6.1bn to £25.1bn. Public sector net debt at the end of June 2015 was £1.513 trillion, or 81.5% of annual UK economic output, up from 80.8% in May.

On Wednesday we had the Bank of England’s policy vote with all nine Bank of England policymakers voting to hold interest rates at 0.5% in July.

The Pound suffered on Thursday morning after the UK’s retail sales unexpectedly declined in June on a wide range of goods including food, furniture, sporting equipment and jewellery. Persistently low inflation and stronger wage growth are leaving Britons with more pounds to spend and helping them support expansion.

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