Investing.com - The pound extended losses against the dollar on
Tuesday, falling to fresh four-and-a-half month lows as data on
housing and inflation bolstered the outlook for the U.S. economic
GBP/USD dropped 0.67% to 1.6614, the lowest level since April
The pair was likely to find support at around the 1.66 level and
resistance at about 1.6680.
The dollar rallied after data showed that U.S. housing starts
jumped 15% in July to an annual rate of 1.093 million, up from
945,000 in June, indicating underlying strength in the housing
In addition, the number of new permits granted to home-builders
accelerated to an annual rate of 1.052 million, from 973,000 in
The upbeat housing day offset another report showing that the
annual rate of inflation in the U.S. ticked down to 2.0% from 2.1%
in June, while consumer prices rose 0.1% last month. It was the
slowest increase in five months.
The pound weakened broadly earlier Tuesday after official data
showed that the annual rate of inflation in the U.K. slowed sharply
in July, curbing expectations for an interest rate increase.
The annual rate of inflation slowed to a two month low of 1.6%
in July from 1.9% in June. Economists had expected inflation to
tick down to 1.8%. U.K. consumer prices fell by a larger than
expected 0.3% in July.
The weak data was seen as diminishing the likelihood that the
Bank of England will raise rates this year after it halved its
forecast for pay growth in 2014 last week.
Sterling was also lower against the euro, with EUR/GBP up 0.31%
to 0.8013, off session highs of 0.8028.
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