Another short-term bearish news for dollar - U.K. inflation accelerated to the highest in at least a decade
Specia Correspondent
Jan. 16, 2007

3% inflation rate is unheard in UK. It is the highest in the in at least a decade.. Consumer prices rose 3 percent, the most since the index began in January 1997, boosted by higher transport and furniture costs, the Office for National Statistics in London said. It far exceeds the estimate consensus by the economists.

The higher inflation rate will force Bank of England to raise rates again. That is bullish for pound sterling on the short term but bullish for dollar on the long term.

The higher rates will attract more carry trade in UK currency. That is bullish for the short term. It will force dollar index to consolidate to some extent. However, over the long term the higher growth rate in UL and Euro zone is bullish for dollar because the exports fro US will rise and imports will decrease as US slows down and Euro zone growth accelerates.

Another short-term bearish news for dollar - U.K. inflation accelerated to the highest in at least a decade
Specia Correspondent
3% inflation rate is unheard in UK. It is the highest in the in at least a decade.. Consumer prices rose 3 percent, the most since the index began in January 1997...
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