Pound Drops As U.K. CPI Falls Unexpectedly
February 14 2017 - 12:11AM
RTTF2
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.
Euro vs US Dollar (FX:EURUSD)
Forex Chart
From Mar 2024 to Apr 2024
Euro vs US Dollar (FX:EURUSD)
Forex Chart
From Apr 2023 to Apr 2024