Pound Sterling – UK Markets

Sterling currency rates touched on a 10-week low against the single currency yesterday, falling to 1.1410 in the midst of weak market sentiment. This morning the pound continues to fall, trading at 1.13 against the euro and 1.63 against the US dollar.

Sterling sentiment remains extremely weak at present, due to the absence of positive UK data and growing levels of government debt. The rise in German business confidence has led to increased pressure on the pound, though economists are speculating this could be positive for sterling as a euro recovery, combined with weak exchange rates will help stimulate UK exports. The next two days are light for UK data with GDP figures released on Friday.

US Dollar – US Markets

The US dollar rose for the fifth consecutive day against the pound, as markets responded favourably to the news that Ben Bernanke would be appointed a second term as Fed chairman. This morning US currency rates are valued at 0.69 versus euro and 0.61 against the pound, while declining against the yen, Australian and New Zealand dollars.

US consumer confidence figures released yesterday show confidence rose for the first time in three months, reaching 54.1 and topping the 50 mark which separates negative from positive data. House prices however, continued to decline, falling 6.1% in the second quarter despite a 0.5% rise in the month to July. Today new home sales figures and durable goods orders will be of interest to US markets.

Euro – European Markets

Euro currency rates have continued to rally this morning, gaining a further 0.3% on the pound and 0.15% on the US dollar. The single currency has also gained against its Asian and European currency partners, touching on 0.84 against the pound and 1.43 against the US dollar.

The German IFO business climate survey has risen to 90.5 in August, while expectations have also risen to 95. The German import price index came in at -0.9% on the month but overall, the euro is stronger due to dramatically improved sentiment in the eurozone. There is no further data in the eurozone today, with economic, consumer and industrial confidence released later in the week.

Other Currencies – Highlights

In Japan export levels have declined in July, falling for the tenth straight month sparking fears that the effects of global stimulus packages may be beginning to wane. Export levels fell 37.5% in July, more than the 36.5% recorded in June. Currency rates for the yen have climbed against the pound, euro and US dollar this morning.

Annual inflation rates in Brazil have slowed for the third consecutive month, prompting speculation that the central bank will keep interest rates low until mid 2010. Currency rates for the Brazilian real fell 1% against the US dollar following the news, and are currently trading at 1.86 per US dollar.

Pound Sterling – UK Markets

Sterling foreign exchange rates have spiked against the US dollar this morning, rising above 1.69 on the back of positive economic data. The pound has also risen against its international currency partners, trading just below 1.18 against the euro.

The UK service sector PMI has expanded to 53.2, ahead of market expectations in July. Manufacturing production has also expanded by 0.4% adding further evidence to the case that the UK economy is on the road to recovery. This will be good news for the Bank of England who will make a decision regarding interest rates and quantitative easing levels tomorrow.

US Dollar – US Markets

Foreign exchange rates for the US dollar are mixed this morning, trading in choppy ranges against the euro and pound recently as risk appetite fluctuates in the market. This morning the greenback is valued at 0.58 versus the pound and 0.69 versus the euro.

Today is packed with US data that is likely to cause more currency volatility. Employment change, factory orders and ISM manufacturing data are released, to be followed by initial jobless claim figures tomorrow. These will help contribute to economic sentiment in the world’s largest economy and are likely to influence global risk appetite. If positive, this could influence the US dollar and yen negatively.

Euro – European Markets

Foreign exchange rates for the euro are also mixed, with the single currency climbing against the Australian and kiwi currencies while losing ground to the pound, yen and US dollar. The euro is currently valued at 1.43 against the US dollar and 0.84 versus the pound.

European retail sales shrunk -0.2% in June, contracting at an annual rate of -2.4%. The European service sector PMI has also noted a modest rise, climbing to 45.7 showing that the 16-nation eurozone could be beginning to climb out of recession. European stocks have climbed this morning in response to the news. An interest rate decision from the ECB is due tomorrow.

Other Currencies – Highlights

Australian foreign exchange rates have dipped from their yearly high as investors hedge risk ahead of unemployment figures released tomorrow. This has led the Australian dollar to reverse some of its gains from speculation that the Reserve Bank will raise interest rates by the end of the year. The New Zealand unemployment rate is also due tomorrow and this could limit appetite for the South Pacific currencies.

The Canadian dollar has weakened overnight, after the Canadian finance minister voiced concerns at the rapid rise of the currency. The CAD has recently appreciated to a 10-month high on the back of rising risk appetite, performing the best of 16 currencies against the US dollar last month. The central bank has noted they will verbally intervene if they believe CAD appreciation will inhibit recovery prospects.

Pound Sterling – UK Markets

The pound shed 0.57 pence against the euro yesterday as exchange rates dipped due to investor fears over the state of the UK budget deficit. This morning the pound has continued to decline, falling to 1.63 against the US dollar and 1.15 against the euro.

With government debt currently running at 56% of GDP, there are growing concerns over how the government plans to tackle the massive debt that could prove inflationary. Charles Bean noted that the weak pound is stimulating the economy through improved export prices and this is aiding UK recovery. This morning’s MPC minutes show the committee unanimously voted to leave QE levels unchanged, as they felt the slowing pace of decline meant no further stimulus was necessary in July. The MPC will meet again in August.

US Dollar – US Markets

US dollar exchange rates have strengthened following Bernanke’s speech to Congress yesterday in which he outlined US economic prospects. This morning the dollar has gained against all its major currency partners with the exception of the yen, climbing to 0.70 versus the euro and 0.61 against a weaker pound.

Ben Bernanke gave a cautious assessment of the US economy to Congress yesterday, stating that while there are “tentative signs of recovery” the situation is highly unstable and Fed policy will be focussed on “fostering economic recovery”. He also noted that unemployment will likely remain high into 2011 with a slow and gradual climb out of recession. With no tightening of monetary policy due in the immediate future, risk appetite took a hit, sending the yen and greenback exchange rates higher. The house price index is due today in the US.

Euro – European Markets

Euro exchange rates are mixed this morning, climbing against the higher yielding pound, Australian, New Zealand and Canadian dollars while losing ground to the yen, US dollar and Brazilian real.

Industrial new orders across the eurozone have fallen -0.2% this month, taking the annual rate of decline to -30.1%. This is in line with falling industrial production across the region as recession contracts almost all sectors of the economy. European equities gained 0.8% yesterday and the euro remains firm in the region of 1.42 against the US dollar. There is no further data in the eurozone today with current account figures due tomorrow.

Other Currencies – Highlights

Australian dollar exchange rates reached a one-month high against the pound overnight, as consumer inflation figures slowed to 0.5%, the lowest level in a year. In combination with negative news in the UK, this allowed the Australian dollar to consolidate on the pound. The news also suggests that the Reserve Bank will leave interest rates on hold for some time.

Japanese yen exchange rates have surged overnight, amid concerns over the pace of global economic recovery. The Japanese yen gained the most against the euro, South African rand and British pound as low risk appetite in the market led investors to seek out the safe havens.

Pound Sterling – UK Markets

Sterling exchange rates are in familiar territory against its international currency partners this morning, trading at 1.63 against the dollar and 1.16 against the euro. The pound has also gained over 0.3% against the Australian, New Zealand and Canadian dollars on the back of improved risk appetite.

The rising UK unemployment rate put sterling under pressure yesterday as official figures showed unemployment had reached the highest level in 12 years. However the pound was able to trim losses with strong US corporate earning figures and GDP in China boosting appetite for risk in the market. There is no major data in the UK today, with sterling exchange rates likely to be affected by the results of the Philadelphia Fed released this afternoon.

US Dollar – US Markets

Exchange rates for the US dollar slid yesterday as strong corporate earning figures buoyed market sentiment and increased risk appetite. The dollar lost ground against the yen, pound and euro, although has pared losses this morning to currently trade at 0.71 versus the euro and 0.61 against the pound.

Minutes from the FOMC meeting released yesterday noted that any further funds from the Federal Reserve would depend on “the Committee’s evolving expectations for the economy”. The Fed have increased their economic outlook, revising growth figures upwards, but the rising balance sheet is an immediate concern. Strong corporate earnings from Intel and Goldman Sachs triggered a dollar sell off yesterday and the Philadelphia Fed manufacturing survey is due in the US today.

Euro – European Markets

The euro exchange rate climbed 1% against the US dollar yesterday, touching on 1.41 on the back of rising market confidence. The euro has since dropped back against the dollar, currently trading at 0.85 versus the pound and 1.40 versus the dollar.

European indices surged ahead yesterday, with French, German and UK stock markets all gaining over 2% following positive figures in the US and China. Consumer prices have declined in France for the second month in a row, falling 0.6% from a year ago due to lower energy prices. There is no data due in the eurozone today with construction output and the trade balance released tomorrow.

Other Currencies – Highlights

Overnight figures from China show annual GDP growth of 7.9% and industrial production growing 10.7% in the past year, supporting this GDP growth. Inflation rates are falling in China, declining 1.7% on the year, with annual retail sales down to 15% growth, falling from a peak of 23% last year. Overall the Chinese economy remains strong and this led to a wave of optimism in global markets yesterday, sending exchange rates higher for the higher yielding currencies.

Consumer inflation in New Zealand rose by 0.6% in quarter 2, slightly higher than the 0.4% forecast by the Reserve Bank. The New Zealand dollar gained over 2 cents against the pound yesterday on the back of strong profits from Intel and Goldman Sachs and has continued to gain this morning, currently trading at 2.55 to the pound.

Pound Sterling – UK Markets

Sterling foreign exchange rates are mixed this morning, climbing against the US, Canadian dollar and Brazilian real while declining against its European currency partners. The pound is currently valued at 1.63 against the US dollar and 1.16 against the euro.

UK unemployment has climbed to 2.38 million after the biggest quarterly increase on record. ONS statistics show unemployment rose by 281,000 in the three months until May, taking the official rate to 7.6% which is the highest in 10 years. Unemployment in both the US and eurozone is running at 9.5%. Inflation figures yesterday saw the pound strengthen as they added to the view that the Bank of England has room to leave interest rates on hold. There is no further data in the UK today.

US Dollar – US Markets

The US dollar has dropped sharply against the euro this morning, falling 0.6% to 0.71 after the publication of euro inflation figures. The greenback has also weakened against its international currency partners as investors diversify following the equity rally yesterday.

Today US markets are packed with data that will provide a current picture of the US economy and likely affect international foreign exchange rates. US consumer price inflation is due, along with industrial production figures which are expected to decline by -0.9%. This is given the lower number of auto assemblies following the massive downturn in GM and the Chrysler bankruptcy. The FOMC minutes are also due today and this will provide an insight into the Fed’s view of the economy at present.

Euro – European Markets

Euro foreign exchange rates have climbed this morning, breaking through the 1.40 level against the US dollar and rising to 0.85 against the pound. The euro is also stronger against its European currency partners as investors seek an alternative reserve with important US figures due this afternoon.

Consumer prices in the eurozone have fallen for the first time in June, dropping 0.1% from the previous month due to a decline in energy prices and reduced household spending. Despite the falling inflation Eurostat figures show none of the Eastern European nations set to join the eurozone have inflation rates low enough to do so. The maximum current rate for joining the eurozone is 2.6% at present. There is no further data in the eurozone today.

Other Currencies – Highlights

The Bank of Japan has left interest rates unchanged at 0.1% but voted to extend emergency credit programmes until the end of the year to help businesses ride out the recession. Governor Shirakawa said the financial conditions are improving in Japan although confidence remains low and the economy is due to shrink 3.4% this year. The yen has weakened overnight as global confidence improves.

China’s GDP statistics for quarter 2 are out this afternoon. As a key market for commodities and exports, continuing Chinese growth is integral to global economic recovery. Foreign direct investment in China has fallen for the ninth month straight as companies trim budgets to weather the recession.

Pound Sterling – UK Markets

Sterling currency exchange rates have recovered this morning, boosted by falling inflation rates in the UK. After touching on a five-week low against the euro and falling to 1.60 against the US dollar yesterday, the pound is currently trading at 1.16 and 1.63 against the euro and dollar respectively.

Consumer prices in the UK have risen 0.3% on the month to June yet the annual inflation rate has fallen to 1.8%. This is the first time in 21 months inflation has fallen below the Bank of England’s 2% target. The retail price index also rose by 0.3% in June and has fallen by -1.6% annually, dragged lower by a reduction in mortgage approvals. These figures could be interpreted positively by markets as an indication that inflation is levelling off. The DCLG house price index has fallen by -12.5% on the year, better than market expectations and inline with observations that the property market could be bottoming out. Tomorrow, average earnings and the unemployment rate are due in the UK.

US Dollar – US Markets

The greenback has lost ground this morning with currency exchange rates declining on the back of positive market data in the UK. The dollar has gained against the yen, Brazilian real and Swiss franc however, as investors diversify from the traditional safe havens.

US equity market staged a minor rally yesterday as a report suggested corporate earnings at Goldman Sachs could rise as much as 15% The S&P closed the day 2.5% up and the boost allowed sterling exchange rates to recover against the dollar. This rally however was complicated by the fact that Larry Summers, an economic advisor to the White House, commented that we may not have seen the bottom for GDP yet and underlying trends remain uneasy. US retail sales and the producer price index will be the focus of foreign exchange markets later in the day.

Euro – European Markets

Euro currency exchange rates are weaker this morning, sinking on the back of downbeat industrial production figures and increased risk appetite. After surging to a five-week high yesterday, the euro has lost 0.5% to the pound while posting gains on the yen, US dollar and Swiss franc.

Eurozone industrial production has fallen 0.5% in May, with the annual rate of decline running at -17%. This is a slight recovery from the -21.6% decline predicted the previous month but is still a massive knock to confidence in the euro. The EUR/USD currency exchange rate has found support at 1.39 after being rejected at 1.40 yesterday. Also this morning the German ZEW economic survey has fallen to -39.5 in July, in contrast to market expectations. As the largest economy in the region, confidence in the German economy is crucial and these figures are likely to affect euro sentiment throughout the day.

Other Currencies – Highlights

Hungarian inflation rates have also unexpectedly slowed in June, falling to 3.7% from 3.8% the previous month. This increases chances of an interest rate cut for Hungary as stable inflation and a less volatile currency are improving investor confidence in the forint. Currency exchange rates for the Hungarian forint have risen to 275.79 per euro this morning. After declining 16% against the euro in the last year, the forint has recovered 5% in the last three months.

Japanese stocks rose overnight, led higher by the US market rally and the expectation of positive corporate earning figures. The yen has lost ground as global confidence rises and markets await results of the Japanese election and Bank of Japan interest rate decision.

Pound Sterling – UK markets

The sterling currency rate weakened against the euro on Friday, closing the day at 1.14. In early trading this morning, the pound has risen to 1.15 against the euro and 1.64 against the US dollar. This is the highest level in 2009 for sterling, fuelled by the improvement in global confidence.

Sterling currency rates have climbed across the board this morning, with the pound reaching some of the best currency rates in 2009 against its major currency partners. This positive sentiment is based on the view that decline in the UK economy may be nearing a bottom. The UK PMI for manufacturing released this morning shows an improvement to 45.4, climbing from 43.1 towards 50 which indicates a positive result. The Bank of England’s MPC will meet later this week for an interest rate decision. With rates currently at a record low of 0.5%, no change is expected and any further activity is expected to be based on quantitative easing.

US Dollar – US Markets

The dollar has declined against most of its international currency partners this morning, trading over 1.3% lower against the pound and 0.6% lower against the euro. US currency rates have also sunk over 1.4% against the Australian and New Zealand dollars.

Currency trends for the US dollar are bearish at present and are expected to remain so over the coming month. Weakness in the auto sector is weighing on dollar sentiment and levels of QE in the US are keeping investors uncertain. General Motors, once a symbol of American consumerism and the world’s biggest company, is to declare bankruptcy later in the day. GM is one of the most high profile casualties of the credit crunch and is expected to undergo a short “surgical” bankruptcy with a new “leaner” company to be launched in 60 days. Personal income and consumption figures are due in the US today and these often provide a degree of market volatility as they are closely related to retail sales and consumer confidence.

Euro – European Markets

The euro has also benefitted from a rise in risk appetite internationally, gaining over 0.5% on the dollar to trade at some of the best currency rates this year. The euro is currently valued at 1.42 against the greenback, 0.86 against the pound and 134 against the yen.

After touching on the best currency rates in 2009 against the US dollar on Friday, the euro has continued to gain this morning on the back of improved risk appetite. This is despite the bankruptcy of General Motors which is expected to cost up to 20,000 European jobs. The PMI for manufacturing in both Germany and the eurozone have continued to climb this month, showing a modest improvement in the European manufacturing sector. The EMU unemployment rate is released tomorrow.

Other Currencies – Highlights

The Australian dollar has surged against the pound and US dollar overnight as improved risk appetite and commodity prices support currency rates for the higher yielding currencies. Numbers of new building permits and the RBA interest rate decision for June are due overnight and this could induce some currency volatility for the Aussie dollar.

The Canadian dollar has also gained overnight on the back of more positive market sentiment, climbing nearly one percent on the US currency. Figures released in China overnight indicated a modest expansion in manufacturing activity and this has boosted market sentiment in North America. Canadian GDP figures and industrial product prices are due this afternoon.

Pound Sterling – UK markets

The sterling-euro exchange rate weakened slightly this morning although the pound is still trading at the top of recent ranges at 1.14 against the euro. The sterling-dollar exchange rate is currently in the region of 1.59 and the pound has gained over 1% to trade at 154 against the yen.

Concern is mounting this morning for British car maker Vauxhall after the breakdown of European GM talks last night. While the German government is set to play a large role in the negotiations, the UK government is facing criticism for its failure to protect British jobs and workers. In another corporate merger, Spanish banking giant Santander is set to take control of high street banks Bradford & Bingley, Abbey and Alliance & Leicester. The CBI distributive trends survey is published today and this is expected to provide further evidence that economic decline is easing in the UK.

US Dollar – US Markets

The US dollar has recovered against the pound and euro overnight with exchange rates climbing to 0.62 and 0.72 respectively. The dollar has also gained over 1.5% on the Japanese yen and has dipped against the Australian, New Zealand and Canadian dollars.

The dollar strengthened yesterday on the back of safe haven buying as investors worried that rising yields on US debt could hinder US economic recovery. The trillion dollar budget deficit could affect levels of quantitative easing in the US and this is putting the dollar under pressure. Figures released yesterday brought further evidence the property market is stabilizing with a rise in pre-owned home prices. Orders for durable goods and new home sales are released today and both are expected to have moderated in recent months.

Euro – European Markets

Euro exchange rates have had a bullish run on the US dollar and pound this morning, rising 0.2% and 0.45% respectively. After reaching a high of 1.40 on May 22, the euro exchange rate has dropped back to 1.38 against the dollar this morning and has risen 1.75% against the yen to 134.

All night negotiations in Berlin failed to secure a future for the European division of General Motors last night, with Italian car maker Fiat and Canadian auto manufacturer Magna the two buyers left in the running. The German government is playing a central role in negotiations and is expected to provide billions of euros worth of finance for the takeover. Unemployment in Germany has risen to 8.2% in May, up 0.1% from last month. The German government expects the economy to shrink 6% this year. Euro area economic confidence figures are released today and the eurozone unemployment rate is due tomorrow.

Other Currencies – Highlights

The New Zealand dollar has strengthened this morning following the announcement of the annual budget. Finance minister Bill English deferred tax cuts as a means of servicing New Zealand’s growing budget deficit and this prompted a positive reaction from the Standard & Poor’s which raised New Zealand’s credit rating. The NZD rose to USD0.61 and has climbed 23% against the dollar in the last three months. Sovereign debt is expected to peak at 43% of GDP in 2017.

The Japanese yen has fallen the most in eight weeks against the US dollar and has also slid against the euro amid signs the recession is easing. Domestically the Japanese economy remains weak as rising unemployment and low domestic demand force down retail sales figures. Retail sales slid by 2.9% in April, falling for the eighth consecutive month. There is a host of economic data out in Japan today including the jobless rate, household spending and industrial production figures for April.

Pound Sterling – UK markets

A bank holiday in the UK yesterday saw sterling currency rates weaken against the euro. This morning the pound has recovered these gains, currently trading at 1.13 on the euro and 1.58 against the US dollar.

Last week’s figures showed the UK economy contracted an unrevised 1.9% in the first quarter of 2009. This is largely due to a 5.9% drop in exports leading to significant contraction in the industrial production sector. Also last week the Standard and Poor’s downgraded the UK sovereign credit rating based on the level of government debt as a proportion of GDP. These factors are responsible for the weak trend in Sterling at present as investors worry over government debt levels worldwide. This morning Virgin Atlantic announced it has doubled annual profits, despite rising oil prices and the recession. This is in contrast to British Airways who announced a GBP401 million pre-tax loss for the last year. There are no major announcements in the UK today.

US Dollar – US Markets

With US markets also closed for a public holiday yesterday the dollar lost ground against the euro overnight. This morning this has been recovered as US currency rates have climbed to 0.63 against the pound and 0.71 against the euro.

At present the underlying trend in US markets is negative as investors worry over government debt levels. While recent weeks have brought investors optimism based on recovery prospects, leading to gains in equities and currency exchange rates, the current focus on government debt levels is creating a sense of underlying nervousness in the market. With the Standard and Poor’s last week downgrading the UK credit rating, other countries have now come under the international spotlight. The US budged deficit is also sizeable and this is affecting dollar sentiment. Consumer confidence figures are out in the US today.

Euro – European Markets

With US and UK markets closed for a bank holiday yesterday the euro advanced on both currencies. This morning, these gains have been trimmed as the pound and dollar recover against the single currency. At present, euro currency rates are weaker against the Australian and New Zealand dollar and little changed against the yen and US dollar.

European equities opened on a weak note this morning amid concerns over the North Korean missile tests and debt amongst European banking institutions. Export levels in Germany plunged 9.7% in the first quarter and the economy as a whole contracted 3.8%. Figures released this morning show new industrial orders for the European Monetary Union have fallen by -26.9%. Although significant, this is an improvement on the last quarter and shows the pace of decline is easing. The German consumer price index is out tomorrow.

Other Currencies – Highlights

South Africa’s economy contracted by -6.4% in the first quarter, sending the entire economy into recession as mining and construction were scaled back due to the global recession. This follows a -1.8% contraction in the fourth quarter of 2008, reflecting a sharp downturn in economic activity. This news snapped a decade of growth for South Africa and weeks of gains for the rand, which weakened on the back of the negative figures.

The New Zealand dollar is likely to experience some volatility this week with the release of the annual budget. This could impact on credit ratings also which seem to be in the international spotlight at present.

Pound Sterling – UK markets

The pound has gained on the US dollar and is currently trading at 1.58, significantly stronger than the 1.55 level earlier in the week. Sterling is also trading at some of the best currency exchange rates in 2009 against the euro and yen on the back of improved investor confidence.

UK retail sales climbed by 0.9% in April putting the UK on track for a 2.6% annual rise in consumer spending. This figure however, is somewhat unreliable as the fact that Easter occurred in April this year creates some seasonal distortion. The Bank of England minutes released yesterday were in line with market expectations yesterday and unanimous MPC decision led the pound to strengthen against the dollar and single currency. The pound has risen over 5% against the US dollar this month, on track for its largest monthly gain in over a decade. First quarter GDP figures are due in the UK tomorrow.

US Dollar – US Markets

The dollar is broadly weaker this morning against its international currency partners, trading at 0.72 against the euro and 0.63 against the pound. The dollar has also lost ground against its Asian currency partners.
Minutes from the FOMC meeting referred to a potential increase in quantitative easing and this has weighed on the dollar yesterday. Uncertainty surrounding QE may affect the dollars status as a reserve and equities are in negative mode this morning. However, the weaker dollar has had little affect on international currency exchange rates suggesting that the view the economy is bottoming out could be gaining some traction. Markets will be interested in the Philadelphia Fed manufacturing survey due today as this is a good indicator of export levels.

Euro – European Markets

The euro has climbed above 1.38 on the US dollar this morning, significantly higher than last week’s best currency exchange rate. The euro is also stronger against most of its international currency partners after comments from the Portuguese finance minister that the strong euro was not a concern of the ECB.

Economic decline in the eurozone has slowed even further in May with both the manufacturing and service sector reporting a more moderate decline. PMIs are regarded as a reliable gauge of private sector activity and the positive figures have led the euro to strengthen this morning. With little data out in the eurozone for the rest of the day the euro-pound exchange rate is likely to be affected by market reaction to UK retail sales and employment data out in the US.

Other Currencies – Highlights

The pound gained over two cents on the New Zealand dollar yesterday. The two currencies are locked in a volatile trading relationship at present as the extent of recession and start of recovery remain unclear. The New Zealand dollar has climbed against its international currency partners this week, shadowing gains made by the Aussie and reports of economic improvement in Asia.

Canada’s annual inflation rate has fallen to 0.4%, the lowest since 1994 on the back of plummeting energy prices. Energy prices have fallen 25% in the last year and consumer prices fell 0.1 on the month. This gives the Bank of Canada more scope to keep interest rates low and the Canadian dollar has gained over 1% on the US dollar overnight.