Pound Drops After U.K. Inflation Slows To 3-month Low
October 17 2018 - 1:53AM
RTTF2
The pound slipped against its major counterparts in early
European deals on Wednesday, as a data showed that U.K. inflation
slowed to a three-month low in September.
Figures from the Office for National Statistics showed that
consumer price inflation came in at 2.4 percent versus 2.7 percent
in August. The rate is also below the expected 2.6 percent.
This was the lowest rate since June.
Month-on-month, consumer prices climbed 0.3 percent compared to
the forecast of 0.5 percent.
Core inflation that excludes energy, food, alcoholic beverages
and tobacco, slowed to 1.9 percent from 2.1 percent in August.
Another report from ONS showed that output price inflation has
remained positive since July 2016. Output prices advanced 3.1
percent year-on-year after gaining 2.9 percent. Economists had
forecast prices to climb again by 2.9 percent.
On a monthly basis, output price growth doubled to 0.4 percent
from 0.2 percent.
At the same time, input price inflation accelerated to 10.3
percent from 9.4 percent in August. On month, input prices gained
1.3 percent, slightly faster than the 1.2 percent rise in
August.
The currency traded mixed against its major counterparts in the
Asian session. While it fell against the yen and the greenback, it
held steady against the franc and the euro.
The pound dropped to 0.8809 against the euro, down by 0.5
percent from a high of 0.8768 touched at 2:15 am ET. The pair had
ended Tuesday's trading at 0.8774. The next possible support for
the pound is seen around the 0.90 level.
The pound depreciated to a 2-day low of 1.3124 against the
greenback, after rising to 1.3193 at 8:45 pm ET. At yesterday's
close, the pair was worth 1.3184. If the pound falls further, it
may find support around the 1.295 area.
Pulling away from a high of 1.3070 hit at 2:15 am ET, the pound
reversed direction and edged down to 1.3010 against the franc. On
the downside, 1.28 is possibly seen as the next support level for
the pound.
The U.K. currency reached as low as 147.33 against the yen,
following an advance to 148.26 at 9:00 pm ET. The pound is seen
finding support around the 146.00 mark.
Looking ahead, Canada manufacturing sales for August and U.S.
housing starts and building permits for September are set for
release in the New York session.
At 12:10 pm ET, Federal Reserve Governor Lael Brainard speaks at
the FinTech conference, jointly-hosted by the Aspen Institute and
the Federal Reserve Bank of Boston.
Deutsche Bundesbank President Jens Weidmann speaks in Berlin at
12:30 pm ET.
Bank of England Deputy Governor Ben Broadbent will participate
in a panel discussion titled "Unconventional Monetary Policies in
the Euro Area, Japan, and the U.K." at the Brookings Institution in
Washington DC at 1:00 pm ET.
The Federal Reserve will release minutes from its September
25-26 meeting at 2:00 pm ET.
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