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Forex - GBP/USD hits 2-1/2 month high after U.K. inflation data

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Investing.com - The pound hit two-and-a-half month highs against the U.S. dollar on Tuesday, amid optimism over a resolution on the U.S. fiscal cliff and after data showed that inflation in the U.K. remained unchanged at the highest level since May last month.

GBP/USD hit 1.6225 during European morning trade, the pair's highest since September 28; the pair subsequently consolidated at 1.6222, easing up 0.12%.

Cable was likely to find support at 1.6156, Monday's low and resistance at 1.6271, the high of September 28.

Market sentiment was boosted by hopes that U.S. lawmakers will reach an agreement in time to avoid automatic tax hikes and spending cuts due to take effect on January 1 which investors' fears could derail the U.S. recovery and threaten global growth.

In the U.K., the Office for National Statistics said that the annual rate of consumer price inflation held steady at 2.7% in November after an unexpected increase in October, compared to expectations for a dip to 2.6%.

Month-over-month, consumer price inflation rose 0.2%, in line with expectations, after rising 0.5% in October.

Core CPI, which excludes food, energy, alcohol, and tobacco costs held steady at a seasonally adjusted 2.6% in November, unchanged from October and confounding expectations for a slight increase to 2.7%.

Sterling was almost unchanged against the euro, with EUR/GBP dipping 0.02% to 0.8122.

Also Tuesday, the ONS said producer price inflation in the U.K. inched up 0.1% in November, compared to expectations for a 0.1% decline.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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