Forexpros – The pound extended gains against the U.S. dollar on Tuesday, as investors trimmed back expectations for more easing from the Bank of England after official data showed that U.K. consumer prices ticked up last month.
GBP/USD hit 1.5956 during European morning trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.5953, gaining 0.34%.
Cable was likely to find support at 1.5840, Friday’s low and short-term resistance at 1.5984, Thursday’s high and a seven-day high.
The Office for National Statistics said consumer price inflation rose to 3.5% year-on-year in March, in line with expectations after increasing 3.4% the previous month.
The report said that higher fuel and clothing prices placed the biggest upward pressure on inflation.
Month-over-month, consumer prices rose 0.3%, in line with expectations, after rising 0.6% in February.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose for the first time since October, ticking up to 2.5% from 2.4% in February.
In the euro zone, a closely watched auction of Spanish short-term government debt saw borrowing costs almost double, but the country sold the full targeted amount of EUR3 billion in 12 and 18-month bonds.
The pound was higher against the euro, with EUR/GBP shedding 0.30% to hit 0.8241.
Later in the day, the U.S. was to produce government data on building permits, housing starts and industrial production.
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