It has been painful for the sterling to watch UK CPI falling yearly for the first time since 1960.

The cable has slumped today to 1.5447, as Apr UK CPI has fallen by 0.1% year on year while the market was waiting for zero change as the same as March.

And over the producing level, April UK PPI Output n. s. a came also today showing falling yearly by 1.7% as the same as March and the expectations was referring to falling by 1.6%, while the core figure rose by only 0.1% as expected as the same as March and also Mar UK PPI input n. s. a declined by 11.7% y/y and the consensus was referring to falling by 11.5% after collapse in March by 13% has been revised to be by 12.8%y/y

While UK DCLG housing price index could show rising by 9.6% yearly and the median forecast was pointing to 7.7% after increasing in March by 7.2%.

By Walid Salah El Din - FX Market Strategist

The gold could be underpinned by the Fed's apparent care of the inflation outlook which has been undermined by lower energy prices and higher greenback value.

The recent FOMC meeting minutes could bring back the gold from trading just below $1200 to be traded now near $1216 per ounce, as the Fed has underscored care of the inflation downside risk.

UST2 YR yield lost 0.08% falling to 0.58% and also UST 10YR yield has fallen to 2.05% after it could surge to 2.13% in the first US session of this week to make the greenback less attractive versus its rivals and to make the gold well-buoyed, after it has been under increasing downside pressure following the bullish release of US non-farm payroll of January.

You can see my dear reader that CHF has already appreciated following SNB's decision to drop 1.20 down ceiling of EURCHF which looked recently very costly, after the Swiss reserve reached CHF495b last December following CHF462.4b in last November on continued defending of that ceiling with growing expectations of watching QE in EU.  

Swiss National Bank Chief Jordan has signaled that the bank will be ready to intervene if it is needed and it looks that he means what he says after this unprecedented sudden appreciation.

The gold could be well-buoyed with dovish interest rate outlook!

The gold could be well-buoyed by retreating of the risk appetite by the end of last week amid worries about dovish inflation outlook in US have been triggered, after sudden falling of the average hourly earnings by 0.2% m/m in December, the median forecast was rising by 0.2% following surging by 0.4% in November was the highest since last February before disappointing down revision last Friday to rising by only 0.2% hurting the inflation outlook in US lowering the market expectations of watching near coming interest rate rising in US in the first half of this year.

The inflation outlook in US has been actually depressed by outside sources as over the consuming level, there can lower imported prices from places such as EU which had the first annual CPI falling preliminary in December since October 2009 and over the producing level, the excessive falling of the oil prices is weighing down ion the inflation outlook across the broad not only in US.