Pound Higher Ahead Of U.K. Inflation Data
March 20 2017 - 12:40AM
RTTF2
The pound climbed against its major counterparts in early
European trading on Monday, ahead of the release of U.K. inflation
data due tomorrow, which is forecast to breach the Bank of
England's target of 2 percent.
Data from Office for National Statistics is forecast to show
that the U.K. consumer price inflation may have advanced 2.1
percent on year in February, from a 1.8 percent increase in
January.
On month, the CPI index is expected to rise 0.5 percent,
reversing a 0.5 percent fall in the previous month.
Core inflation is seen rising to 1.7 percent year-on-year,
following a 1.6 percent growth in January.
A solid reading is likely to intensify the debate at the Bank of
England over the appropriate time to increase interest rates from
their current record low of 0.25 percent.
A weaker dollar also supported the pound, as the former fell
across the board after the Group of 20 major economies abandoned
the pledge to resist protectionism as a result of the U.S.
protectionist stance.
The latest survey from property tracking website Rightmove
showed that the average asking prices for a house in the United
Kingdom increased further in March.
House prices in England and Wales climbed 1.3 percent
month-over-month in March, following a 2.0 percent rise in
February.
The pound held steady against its major rivals in the Asian
session, with the exception of the euro.
The pound climbed to 1.2435 versus dollar, its highest since
February 28. The next possible resistance for the pound is seen
around the 1.26 mark.
The pound that closed Friday's trading at 139.65 against the yen
edged up to 140.03. If the pound-yen pair extends rise, 141.00 is
likely seen as its next resistance level.
The pound firmed to near a 2-week high of 1.2397 against the
franc, off its early low of 1.2333. On the upside, 1.25 is possibly
seen as the next resistance level for the pound.
The pound rose back to 0.8663 against the euro, from its early
low of 0.8692.The currency is edging closer to pierce its early
nearly 2-week high of 0.8659. The pound is seen finding resistance
around the 0.85 region.
Figures from Destatis showed that Germany's producer prices
increased at the fastest pace in more than five years in
February.
Producer prices advanced 3.1 percent in February from prior
year, the fastest since December 2011, when prices gained 3.5
percent. Prices had climbed 2.4 percent in January.
Looking ahead, the German Bundesbank releases its monthly report
at 7:00 am ET.
Canada wholesale sales data for January is due at 8:30 am
ET.
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