Forex Pros – The pound rose to a three-day high against the U.S. dollar on Tuesday, ahead of the release of U.K. data on consumer prices which was expected to show that U.K. inflation has remained above target.
GBP/USD hit 1.6442 during early European trade, the pair’s highest since June 9; the pair subsequently consolidated at 1.6417, gaining 0.27%.
Cable was likely to find support at 1.6214, Monday’s low and resistance at 1.6495, the high of June 1.
On Monday, Bank of England policymaker Martin Weale said that the central bank needed to raise interest rates in the short-term to preserve the bank’s inflation-fighting credibility and to give it more flexibility in the months ahead.
He acknowledged that “in the short term the performance of the economy would be weakened slightly” by raising rates despite warning that recent data already suggested “short term economic growth may be slightly weaker than we had hoped”.
Meanwhile, the pound was slightly lower against the euro, with EUR/GBP inching up 0.04% to hit 0.8806.
Later in the day, the U.K. was to release government data on consumer price inflation, while the U.S. was to publish official data on retail sales and producer price inflation.
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