Forex - GBP/USD rises to 1-week highs after U.K. inflation report
Investing.com - The pound rose to one-week highs against the U.S. dollar on Tuesday, after the release of higher-than-expected inflation data from the U.K., while the greenback remained broadly under pressure.
GBP/USD hit 1.4311 during European morning trade, the pair’s highest since April 4; the pair subsequently consolidated at 1.4287, gaining 0.33%.
Cable was liekly to find support at 1.4107, Monday’s low and resistance at 1.4378, the high of April 1.
The U.K. Office for National Statistics said the rate of consumer price inflation rose by 0.5% last month, above forecasts for an increase of 0.4% and compared to the 0.3% rise in February.
Month-over-month, consumer prices rose 0.4% in March, above forecasts for an advance of 0.3% and following a decline of 0.2% in the prior month.
Bank of England Governor Mark Carney will now have to write an open letter to the Chancellor of the Exchequer, George Osborne, as inflation is more than a percentage point below the central bank's target of 2.0%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a rate of 1.5% last month, above forecasts that were looking an increase of 1.3% and compared to the 1.2% gain in February.
The data also showed that the house price index rose 7.6% in March, below forecasts for a gain of 8.1% and following a 7.9% increase in February.
Meanwhile, the dollar remained under pressure on the view that the Federal Reserve will stick to a cautious approach on hiking interest rates this year amid concerns over the outlook for the global economy.
Lower interest rates make the dollar less attractive to yield seeking investors.
Sterling was steady against the euro, with EUR/GBP at 0.8008.
