Investing.com - The pound slid against the greenback on Tuesday
after U.K. inflation data missed expectations.
The dollar, meanwhile, saw safe-haven demand ahead of Federal
Reserve Chairman Ben Bernanke's Wednesday testimony in the U.S.
In U.S. trading on Tuesday, GBP/USD was trading at 1.5152, down
0.69%, up from a session low of 1.5112 and off from a high of
The pair was likely to find support at 1.5034, the low from April
4, and resistance at 1.5281, Monday's high.
In the U.K. earlier, the Office for National Statistics said the
country's consumer price index slowed to an annual rate of 2.4% in
April from 2.8% the previous month, missing expectations for a
reading of 2.6%.
Month-over-month, consumer price inflation rose 0.2% in April,
below expectations for a 0.4% increase, after rising 0.3% in March.
Core CPI, which excludes volatile food and energy costs, came in at
2.0% from 2.4% in March.
Analysts were expecting a 2.3% reading for core inflation prices.
Softer-than-expected inflation rates sparked talk that incoming
Bank of England Governor Mark Carney has more room to loosen policy
to spur more economic recovery if need be.
Meanwhile the dollar moved higher amid a flight to safety ahead of
Fed Chairman Ben Bernanke's Wednesday testimony before Congress.
Stimulus measures currently in place, such as the Fed's monthly
USD85 billion bond-buying program, weaken the greenback by flooding
the economy full of liquidity to keep interest rates low and
encourage investing and hiring.
Federal Reserve officials have suggested in public recently that
the U.S. central bank may begin to scale back stimulus tools this
summer, though some backtracked on such comments, causing
uncertainty in markets that made the dollar more attractive due to
its safe-haven appeal.
The pound, meanwhile, was down against the euro and down against
the yen, with EUR/GBP trading up 0.89% at 0.8520 and GBP/JPY down
0.43% at 155.32.
All eyes will focus on Ben Bernanke Wednesday.
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