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Forex - GBP/USD pares gains after U.K. inflation data

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Forex Pros - The pound pared gains against the U.S. dollar on Tuesday, after U.K. inflation data came in as forecast, further dampening expectations for a near-term interest rate hike by the Bank of England.

GBP/USD pulled away from 1.6440, the pair's highest since June 9 to hit 1.6387 during European early afternoon trade, still up 0.09% on the day.

Cable was likely to find support at 1.6214, Monday's low and resistance at 1.6495, the high of June 1.

Earlier in the day, the U.K. Office for National Statistics said consumer prices rose 0.2% in May, keeping the annual inflation rate at 4.5%, in line with expectations.

Core inflation dropped to 3.3% from April's record high of 3.7%, due to lower transport costs, particularly air fares.

On Monday, BoE policymaker Martin Weale said that the central bank needed to raise interest rates in the short-term to preserve the bank's inflation-fighting credibility and to give it more flexibility in the months ahead.

However, bank Governor Mervyn King warned last month that attempts to bring inflation down quickly would harm the economy.

Meanwhile, the pound slipped against the euro, with EUR/GBP easing up 0.06% to hit 0.8807.

Later Tuesday, the U.S. was to publish official data on retail sales and producer price inflation.

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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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