Forex Pros – The euro extended losses against the pound on Tuesday, falling to a two-day low after official data showed that consumer prices in the U.K. rose to a 28-month high in February.
EUR/GBP hit 0.8687 during European morning trade, the pair’s lowest since Friday; the pair subsequently consolidated at 0.8684, shedding 0.41%.
The pair was likely to find support at 0.8624, the low of March 15 and resistance at 0.8760, the high of March 18 and a four-month high.
The Office for National Statistics said consumer price inflation rose to 4.4% in February from 4.0% the previous month, outstripping expectations for a 4.2% gain.
Higher housing costs, domestic heating bills and clothing prices drove the increase in CPI, the ONS said.
A separate report showed that public sector net borrowing totaled GBP10.2 billion in February, up from GBP8.1 billion for the same month in 2010 and above forecasts of GBP8.0 billion.
The pound was also higher against the U.S. dollar, with GBP/USD rising 0.40% to hit 1.6375.
On Wednesday, the British government was due to announce its budget for 2011.
ForexPros.com
