The pound weakened significantly against the dollar, having lost about 1% after UK CPI data came out weaker than expected. This has caused a revision of expectations for the Bank of England's rates. Experts note that in this regard tomorrow's publication of the minutes of the meeting of the Central Bank will be of particular interest to investors. Recall, consumer prices fell 0.1 percent in April compared to the previous year, while, according to forecasts, they were to remain unchanged, as it was in March. This was the first annual decline since the official data series began in 1996, and based on comparable estimates this was the first drop since 1960. On a monthly measurement of consumer prices rose by 0.2 percent, showing the same growth rate as in March. Core inflation fell to 0.8 percent from 1 percent in March. Economists forecast that it will remain at 1 percent. Another report from the ONS showed that producer prices continued to decline in April. Selling prices fell by 1.7 percent for the third month in a row in April. On a monthly measurement of sales prices rose by 0.1 percent. The annual decline in purchasing prices slowed to 11.7 percent from 12.8 percent in March. On a monthly basis, prices paid rose by 0.4 percent.
The dollar rose substantially against the euro, updating the maximum on May 11 due to the publication of positive statistics on the US housing market and the ECB's comments with regard to the scope of QE. It is learned that the establishment of new homes in the US rose by 20.2% compared to the previous month and reached a seasonally adjusted annual rate of 1135 thousand. In April. This is the highest since November 2007, and the largest increase in percentage from February 1991. Share of single-family units, which exclude apartments, and represent almost two-thirds of the market, rose by 16.7%. Bookmarks multifamily units, including apartments and condominiums increased by 27.2%. New applications for building permits, which determine the volume of construction in the coming months, increased by 10.1%. Economists had expected in April bookmarks of new homes reached the level of 1019 thousand. Compared with a year earlier bookmarks of new homes rose 9.2% in April, while building permits rose 6.4%.
The Canadian dollar fell against the US dollar, reaching a month low after the release of positive statistics on the US housing market. However, the currency was able to regain some lost ground against the background of the head of the Central Bank of Canada runners, who noted that the Canadian economy is moving in the right direction, increasing the momentum of growth, and that the January reduction in operating rates. Poloz also said that the Central Bank expects partial recovery in the 2nd quarter and reaching its full capacity by the end of 2016. However, he warned that there are many uncertainties in the current economic environment. As for inflation, Poloz said that it will steadily move towards the target level of 2% towards the end of 2016. Investors watched this performance to see whether Poloz is less optimistic about the economy in Canada, but there were no major changes, despite the recent weak data in Canada.