Forex Pros – The pound rose to a two-week high against the U.S. dollar on Wednesday, after data showing U.K. inflation jumped to twice the Bank of England’s target in January fuelled speculation the bank may soon raise interest rates.
GBP/USD hit 1.6185 during European morning trade, the pair’s highest since February 3; the pair subsequently consolidated at 1.6155 gaining 0.19%.
Cable was likely to find support at 1.6005, Tuesday’s low and resistance at 1.623, the high of February 2.
Data on Tuesday showed U.K. consumer prices jumped to 4.0% year-on-year in January, double the BOE’s 2% target rate.
Following the report, BOE Governor Mervyn King said inflation was likely to rise towards 5% in the coming months and was as likely to be above target as below in the next two to three years if rates were to rise as markets expected.
Meanwhile, the pound was down against the euro, with EUR/GBP rising 0.29% to hit 0.8388.
Later in the day, the U.K. was to publish official data on employment while the BOE was to publish its quarterly inflation report.
Elsewhere, the U.S. was to publish official data on producer price inflation, as well as reports on building permits, housing starts and industrial production. In addition, the Federal Reserve was to publish the minutes of its most recent monetary policy meeting.
ForexPros.com
