Daily Forex Commentary - UK (Raw Materials and inflation) Clarification pls?
"It's easy to say that the pound lost to the dollar and the yen because of the worse-than-expected PPI report on Friday. (Prices of raw materials that manufacturers pay for dropped by 2.2% in June and disappointed the market's -2.1% forecast.) After all, soft inflation figures could give the BOE more reason to remain dovish, right?"
Hi all, this was Pipnoculars commentary on the GBP today - 9th July. I don't get the logic of the figures here. Either it is the minus sign foxing me, or I'm just plain confused. If raw materials drop in cost to manufacturers by a GREATER (?) degree, then surely this is good for manufacturing output figures?
Inflation (OH no, not that brick wall again!) For some reason, I cannot get my head around the inflation impacts on the markets. Inflation = higher cost of money or devalued money, right? Soft inflation (ie not a lot of inflation about?) means that the BOE want to print? If inflation is not an issue, then why might that be an incentive to print? Is this because there is less of a risk of it devaluing if dosh gets printed?