Pound Falls To New Multi-day Lows Against Franc And Euro Amid U.K. CPI
05:21, 17th July 2012
(RTTNews) - In early European deals on Tuesday, the pound fell to new multi-day lows against the franc and the euro after a report showed that the U.K. inflation annual inflation unexpectedly eased in June to reach the lowest level since November 2009.
Consumer price inflation fell to 2.4 percent in June from 2.8 percent in May, data from the Office for National Statistics showed. Economists expected the rate to remain unchanged at the May level. Despite falling for a third month in a row, the headline rate stayed above the central bank's 2 percent target.
On monthly basis, the consumer price index fell 0.4 percent in June following a 0.1 percent drop in the previous month. The index was expected to fall 0.1 percent in June.
A separate report from ONS showed that prices in the United Kingdom increased at a faster pace in May. The house price index increased 2.3 percent year-on-year in May, marking the second consecutive growth, after it moved up 1.4 percent in April.
The pound that showed choppy trading against the euro and the franc in the Asian session slipped in European morning trading. The pound hit 4-day lows of 1.5255 against the franc and 0.7877 against the euro, compared to yesterday's close of 1.5305 and 0.7851, respectively. The next downside target level for the pound is seen at 1.52 against the franc and 0.79 against the euro.
Against the greenback, the pound fell to as low as 1.5613 from an early Asian session's near 2-week high of 1.5680. The pound-greenback pair is now worth 1.5622, compared to Monday's close of 1.5638. The next downside target level for the pound is seen at 1.555.
The British currency moved sideways against the yen in Asian deals after climbing to a 5-day high of 123.84. The pound that declined to 123.35 at 4:30 am ET rebounded shortly. The pair is now worth 123.65, compared to Monday's close of 123.34.
Looking ahead, Bank of Canada's interest rate decision is due at 9 am ET. The central bank is widely expected to keep rates on hold at 1.00 percent.
The U.S. CPI and industrial production for June, NAHB housing market index for July and the Treasury Department's report on the flows of financial instruments into and out of the U.S. for May are due in the New York morning session.
Federal Reserve Chairman Ben Bernanke will give testimony before Congress later in the day.
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