HiFX: Foreign Exchange Specialists

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November 18, 2008

Today saw the latest release of the US Producer Price Index for the month of October.  Producer prices fell by 2.8% m/m the largest decrease on record.  This marks a significant departure from only a few months back when there was global concern over mounting price pressures via escalating commodity prices.  The rapid decline in global growth has helped to dampen demand and therefore commodity prices over recent months. The market saw little response in reaction to the event release but justifies expectations that interest rates can be reduced further without increasing inflationary concerns.