Forex Pros – The euro rose to a fresh daily high against the pound on Tuesday, after official data showed that U.K. consumer prices rose in line with economists’ expectations in January, disappointing investors who hoped for a higher reading.
EUR/GBP hit 0.8444 during European morning trade, the daily high; the pair subsequently consolidated at 0.8433, gaining 0.29%.
The pair was likely to find support at 0.8388, the low of February 7 and a three-week low and resistance at 0.8527, Thursday’s high.
The Office for National Statistics said the rate of consumer price inflation rose to 4.0% in January, in line with economists’ forecasts, from 3.7% in December.
On the month, CPI rose by 0.1%, the first time it has risen between December and January on record. CPI typically falls in January due to post-Christmas discounting.
The increase, which was driven by higher oil prices and increased indirect taxation, means that inflation has been at least a percentage point above the Bank of England’s 2% target for more than a year.
The pound was also down against the U.S. dollar, with GBP/USD slipping 0.08% to hit 1.6026.
Earlier in the day, official data showed that that the German economy expanded at the slowest pace in a year in the fourth quarter. Germany’s gross domestic product rose 0.4% from the third quarter, when it increased 0.7%, undershooting expectations for a 0.5% increase.
ForexPros.com
