Forexpros – The euro fell to a session low against the pound on Tuesday, after official data showed that consumer prices in the U.K. eased in February, dampening expectations for a fresh round of easing measures from the Bank of England.
EUR/GBP hit 0.8316 during European morning trade, the session low; the pair subsequently consolidated at 0.8318, slipping 0.14%.
The pair was likely to find support at 0.8282, Monday’s low and a one-month low and resistance at 0.8344, the session high.
The Office for National Statistics said annual rate of consumer price inflation in the U.K. declined to the lowest since November 2010 in February, decelerating to 3.4% from 3.6% the previous month, in line with market expectations.
Core CPI, which excludes volatile food and energy costs fell to 2.4% in February, the lowest level since November 2009.
U.K. consumer prices have declined in each of the past five months, after rising to a record-high 5.2% in September.
The BoE has forecast that inflation will fall below its 2% target by the end of 2012.
In the euro zone, Italian Prime Minister Mario Monti was to hold talks with union leaders later in the day, to discuss reforming the country’s labor market, as he attempts to reverse the fortunes of the region’s third largest economy.
The pound remained lower against the broadly stronger U.S. dollar, with GBP/USD sliding 0.19% to hit 1.5862.
Later in the day, the U.K. was to produce industry data on industrial order expectations, while the U.S. was to produce official data on building permits and housing starts. In addition, Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington; his comments would be closely watched.
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