Pound Falls To 4-day Low Against Euro

05:42, 18th May 2010

(RTTNews) - The pound that showed choppy trading against the currencies of Europe and Switzerland in Asian deals on Tuesday declined during early European session as a report showed that U.K.'s annual inflation rose to the highest level since November 2008.

Meanwhile, the pound pared its Asian session gains against the dollar and the yen.

U.K. annual inflation rose to 3.7% in April, the highest since November 2008, data from Office for National Statistics showed today. The annual rate stayed above the central bank's 2% target and consensus forecast of 3.5%. In March, annual inflation was 3.4%. On a monthly basis, consumer prices were up 0.6% in April, faster than the consensus forecast of 0.4%.

Moving down from a high of 1.4522 hit at 3:30 am ET, the pound fell to 1.4415 against the dollar at 5:25 am ET. The pound-dollar pair, which was worth 1.4483 at yesterday's close, is now trading at 1.4440. On the downside, the pound may target around the 1.425 level.

Against the yen, the pound fell to 133.71 at 5:10 am ET, from a high of 134.84 hit at 4:30 am ET. If the pound drops further, it may likely target the 132.00 level.

Japan's consumer confidence in April improved to 42.1 from March's 41, a monthly survey conducted by the Cabinet Office showed today. Households' consumer confidence also rose in April to 42 from 40.9 in March. The reading matched consensus forecast.

The pound that showed choppy trading against the currencies of Europe and Switzerland in Asian deals on Tuesday declined during early European session.

As of now, the pound is trading at a 4-day low of 0.8584 against the euro, compared to yesterday's close of 0.8563.

Against the franc, the pound is currently worth 1.6340, down from yesterday's close of 1.6383.

If the pound weakens further, it may likely target 1.627 against the franc and 0.872 against the euro.

The French preliminary non-farm pay rolls for first quarter, Italian trade balance for March, German May ZEW economic sentiment index, the Euro-zone final CPI for April and trade balance for March, which were released today likely influenced the euro.

Looking ahead, the U.S. PPI, housing starts and building permits-all for the month of April have been slated for release in the upcoming New York session.