North Korean Nuclear Test And UK Inflation Data Shape Currency Market Price Action

February 12, 2013 - Written by John Cameron

STORY LINK North Korean Nuclear Test And UK Inflation Data Shape Currency Market Price Action

The safe haven US Dollar has picked up some support in the currency markets during the overnight session thanks to reports of seismic activity in North Korea. The minor ‘quake’ is thought to have been caused by a nuclear test from the secretive nation – if this proves to be the case, then this is North Korea’s third such action in the last seven years.

The nation, considered to be a ‘pariah state’ by many global politicians, confirmed a short time ago that it had carried out its third underground nuclear test of recent years, a short time ago. The news has seen some flight to safety from global investors during last night’s Asian session, sending the Pound Dollar exchange rate down as low as 1.5644.

Elsehwere, last night’s session saw the release of the latest UK Royal Institute of Chartered Surveyors house price survey, which provided some reason for optimism for investors holding Sterling-denominated assets. The closely-watched RICS survey revealed that last month saw the number of UK property transaction rise for the fourth month on the trot.

The news has seen the Pound register minor gains against the euro, sending the GBP EUR exchange rate back up to close to 1.1700 during early trading in Europe. The key data release for the Pound today comes in the form of January’s benchmark CPI inflation data, due for release within the next hour. With the Bank of England having decided against more Quantitative Easing for the UK economy last week, a showing of above December’s annualised print of 2.7% would be likely to quell market babble regarding any near-term increase in Britain’s controversial QE programme. Such an outcome could send the GBP EUR exchange rate back up into the 1.1800s once more – a level where it had started the week.

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