The British pound weakened against most major currencies in the early European session on Tuesday, after data showed that U.K. inflation rose less-than-expected in January.

Data from the Office for National Statistics showed that U.K. inflation accelerated to the highest level in more than two years in January. Inflation rose to 1.8 percent in January, the highest since June 2014, from 1.6 percent in December. Nonetheless, the rate was weaker than the expected 1.9 percent.

Month-on-month, consumer prices dropped 0.5 percent, offsetting December's 0.5 percent increase. This was the first fall in six months and matched economists' expectations.

Another report from ONS showed that input prices surged at the fastest pace since September 2008. Input prices jumped 20.5 percent annually, following a 17 percent rise in December. Prices were forecast to grow 18.5 percent.

Meanwhile, monthly growth in input prices eased to 1.7 percent from 2.7 percent, but stayed above the expected 1 percent.

Factory gate prices climbed 3.5 percent year-on-year in January. This was the seventh consecutive period of annual price increases after two years of falls. On month, output prices gained 0.6 percent versus the expected rate of 0.3 percent.

In the Asian trading today, the pound held steady against its major rivals.

In the early European session, the pound fell to a 4-day low of 1.2458 against the U.S. dollar, from an early 5-day high of 1.2547. If the pound extends its downtrend, it is likely to find support around the 1.22 area.

Against the euro, the pound slipped to a 4-day low of 0.8522 from an early high of 0.8449. The pound is likely to find support around the 0.86 region.

The pound edged down to 1.2517 against the Swiss franc, from an early near 3-week high of 1.2605. On the downside, 1.23 is seen as the next support level for the pound.

The pound dropped to 141.42 against the yen, from an early high of 142.56. The pound may test support near the 138.00 region.

Looking ahead, U.S. PPI for January and U.S. NFIB small business index for January are set to be published in the New York session.

At 8:30 am ET, Richmond Fed President Jeffrey Lacker is expected to speak before the 2017 Economic Forecast forum hosted by the Lyons Companies and the Lerner College Center for Economic Education and Entrepreneurship, in Newark, U.S.

At 10:00 am ET, Federal Reserve Chair Janet Yellen will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC.

At 1:00 pm ET, Federal Reserve Bank of Dallas President Robert Kaplan is expected to speak at the Greater Houston Port Bureau luncheon series, in Houston, U.S.

At 1:15 pm ET, Atlanta Fed President Dennis Lockhart is scheduled to speak on "Crisis, Recession and Recovery" before the Huntsville Rotary Club of Atlanta, in Huntsville, U.S.

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