UK Trade Deficit increases in June. Producer Prices rise. Pound falls to USD in forex | CountingPips Forex & Currency Trading Blog

August 11, 2008 - Forex Economic News

UK Trade Deficit increases in June. Producer Prices rise. Pound falls to USD in forex.

The United Kingdom's total trade deficit increased in June according to a release by the Office of National Statistics today. The U.K.'s deficit on the trade of goods and services reached £4.4 billion in June following a revised £4.1 billion deficit in May. The deficit increase was more than expected by the market as economic forecasts had predicted a deficit of £4.20 billion for the month.

UK Economic data, GBP forex trading. The UK showed a deficit on the trade in goods of £7.7 billion in June which was up from £7.4 billion in May. The UK registered a surplus on the trade in services of £3.3 billion in June which matched the surplus registered in May. Exports increased in June by £0.9 billion while imports also increased by £1.2 billion. The U.K.'s deficit with the European Union totaled £2.9 billion in June while its deficit with the rest of the world excluding the EU was £4.7 billion.

UK factory gate inflation increases in July to highest annual increase on record.

U.K. inflation increased in July according to data released in a separate report by National Statistics. The U.K.'s producer price index or factory gate index increased by 0.4 percent in July following a June increase of 0.9 percent. The increase brought the annual rate of inflation to 10.2 percent for July after an annual rate of 10.0 percent in June. Economic forecasts had expected the July factory inflation increase to measure 0.5 percent and the annual rate to reach 10.3 percent. The 10.2 percent annual increase in factory prices represents the largest yearly increase since 1986 when the index began recording the data.

Increases in the prices of petroleum and chemical products contributed to the producer inflation for the month. The core or "narrow" inflation, excluding volatile sectors of the index, showed an annual increase of 6.7 percent for July.

The pound sterling has lost ground to the U.S. dollar in forex trading today while being mixed against other major currencies. The GBP/USD has declined from approximately 1.9211 at the start of the trading week yesterday to trading around 1.9130 today in the afternoon of the U.S. session. The pound has fallen against the dollar for three consecutive weeks and traded as high as 2.015 on July 15th. The pound has also fallen today against the Japanese yen(210.80) and Swiss franc(2.0729) today while trading virtually unchanged from last week's close against the euro at 0.7810. The pound has fallen against the euro for four consecutive weekly closes and traded as high as 0.8020 on July 13th.

GBP/USD Chart - The pound sterling falling vs. the US dollar in forex trading today(4H chart).

Forex Chart

tags: forex trading, gbp, pound sterling, inflation, trade balance, uk

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