Forexpros – The pound fell to a three-day low against the U.S. dollar on Tuesday, after data showing that the rate of inflation in the U.K. hit a three-year high in September added to concerns over slowing economic growth.
GBP/USD hit 1.5710 during European morning trade, the pair’s lowest since October 13; the pair subsequently consolidated at 1.5714, shedding 0.18%.
Cable was likely to find support at 1.5664, the low of October 13 and resistance at 1.5820, the days high.
The Office for National Statistics said consumer price inflation rose 0.6% last month, taking the annual inflation rate to 5.2%, matching the record high hit in September 2008. Analysts had expected the annual rate to jump to 4.9%.
The data fuelled concerns that the U.K. economy will undergo a prolonged period of high inflation and lower growth after the Bank of England announced a second round of quantitative easing to shore up the economy earlier this month.
Meanwhile, the pound was higher against the euro, with EUR/GBP shedding 0.30% to hit 0.8699.
Late Monday, Moody’s Investors Service put France on three months notice that “pressure from weaker debt metrics,” could leave the country with a negative credit outlook and could result in a downgrade.
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