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Eurozone inflation down at -0.2%

Eurozone CPI missed market expectations on no change and level of 0.0% and fell to -0.2% in December. Core CPI rose to 0.8%. This negative rate for euro area annual inflation in December is driven by a fall in energy prices (-6.3%, compared with -2.6% in November), while prices remain stable for food, alcohol & tobacco (0.0%, compared with 0.5% in November) and non-energy industrial goods (0.0%, compared with -0.1% in November). The only annual increase is expected for services (1.2%, stable compared with November). 
 
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GBP/USD Daily Forecast - 30 December

There were no data releases from the UK yesterday, however Sterling still remains on the downside as low inflation in the UK has pushed back market expectations of an interest rate rise as far as 2016. Another factor that added to the concerns is that UK unemployment was unchanged at 6.0% in three months to November, while decline to 5.9% was expected. Final GDP reading showed 0.7% growth in third quarter, but BoE is announcing a possible slowdown at the end of the year.

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Sterling little changed at the beginning of the week

There were no data releases from the UK today, however Sterling still remains on the downside as low inflation in the UK has pushed back market expectations of an interest rate rise as far as 2016. Another factor that added to the concerns is that UK unemployment was unchanged at 6.0% in three months to November, while decline to 5.9% was expected. Final GDP reading showed 0.7% growth in third quarter, but BoE is announcing a possible slowdown at the end of the year.
 
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Number of unemployed in Great Britain down by 26,900

According to the latest release Claimant Count was down by 26,900 from October 2014, beating market expectations on decrease by 19, 400. It was also down by 368,000 from a year earlier, but 121,700 higher than the pre-downturn trough of 778,400 for February 2008. On the other hand unemployment rate for those aged 16 and over for October 2014 was 6.0%, up from 5.9% in September. Analysts were anticipating no change.

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