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Forex - GBP/USD weakens ahead of key U.K. CPI data

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Forexpros - The pound was down against the U.S. dollar on Tuesday, pulling back from the previous day's four-day high as markets awaited key data on U.K. consumer price inflation as well as a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy later in the day.

GBP/USD hit 1.6322 during early European trade, the daily low; the pair subsequently consolidated at 1.6338, shedding 0.32%.

Cable was likely to find support at 1.6165, the low of August 12 and resistance at 1.6409, the high of August 9.

The U.K. Office for National Statistics was due to release consumer price inflation data for July later in the day.

The report could show that consumer prices in the U.K. rose by 4.3% in July, after rising by 4.2% in June.

Core CPI, which excludes food, energy, alcohol, and tobacco costs was forecast to increase by 3.1% in July, accelerating from 2.8% in June.

Meanwhile, markets were awaiting a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris later in the day, as the two leaders attempt to ease fears over the euro zone's ongoing debt crisis.

Preliminary data released earlier showed that German economic growth nearly stalled during the second quarter, increasing by a seasonally adjusted 0.1%, below expectations for a 0.5% increase.

The previous quarter's figure was revised down to growth of 1.3% from a previously reported 1.5% increase.

Elsewhere, the pound was higher against the euro, with EUR/GBP dipping 0.11% to hit 0.8802.

Later in the day, the U.S. was to produce official data on building permits and housing starts, as well as reports on import prices, the capacity utilization rate and industrial production.

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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.

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