UK PPI rise, UK trade deficit dips, RBA minutes push AUD.

February 11, 2008 - Forex Economic News

UK Producer Prices rise in January.

Economic news out of the UK showed that factory output prices or producer price inflation increased in January to an annual rate of 5.7 percent according to the Office of National Statistics. The factory gate output prices gauge the prices at which goods are sold by UK manufacturers and is a measure of inflation. Output prices increased by 1.0 percent in January from December, largely due to increases in crude oil.

UK Trade Deficit decreases in December.

The UK trade deficit decreased in December according to the Office of National Statistics. December's trade deficit was £4.7 billion down from a revised £4.8 billion in November. The UK showed a deficit on trade in goods of £7.6 billion which was down from £7.9 billion in November while the UK surplus on trade in services was £2.9 billion in December down from £3.1 billion from Novmeber.

Minutes of Australian rate increase meeting push AUD to gain.

The Australian Dollar got a boost today from the minutes of the RBA's February meeting when it increased its interest rate from 6.75 percent to 7.00 percent. The minutes report showed that inflation is of paramount concern to the RBA and indicated that another rate hike may be in the future if conditions in the economy persist. The RBA statement said that, "The performance of the Australian economy has to date remained robust. The latest national accounts showed growth of more than 4 per cent over the year to the September quarter, with domestic demand expanding by 5½ per cent, well in excess of the trend growth in the economy’s productive capacity." The statement went further on the economy in regards to inflation, "In the short term, inflation as measured on a year-ended basis is likely to increase further" and "Given the current strength of domestic demand and pressures on capacity, a significant moderation in demand will be needed if inflation is to be satisfactorily reduced over time". If the economic landscape does not have a dampening effect on inflation then the RBA statement said that, "monetary policy is likely to need to be tighter in the period ahead."

The next rate policy meeting for the RBA will take place on March 4. See the RBA statement here. Here is how the AUD is faring in the afternoon of the U.S. trading session. The AUD/USD pair is at 0.9040, EUR/AUD pair is at 1.6047 and AUD/JPY pair is at 96.5570.

Tags: PPI, factory gate inflation, Trade Deficit, RBA, meeting minutes, forex rates, aud/jpy, eur/aud, aud/usd

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