The British currency declined against the U.S. dollar on Tuesday, after data
showed that consumer price inflation in the U.K. slowed to a record-low
in January, though sentiment on the greenback remained fragile
after a recent string of downbeat U.S. economic reports.
GBP/USD hit 1.5337 during European morning trade, the session low; the pair subsequently consolidated at 1.5349, slipping 0.10%. Cable was likely to 1.5206, the low of February 12 and resistance at 1.5444, Monday's high.
The U.K. Office for National Statistics said the rate of consumer price inflation descended to 0.3% last month from 0.5% in December, broadly in line with market expectations.
Consumer price inflation declined 0.9% in January, compared to expectations for a drop of 0.8% and after holding flat in December.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a rate of 1.4% last month, up from 1.3% in December and above forecasts for a reading of 1.3%.
The house prices index climbed 9.8% in December, below forecasts for a gain of 11.1% and down from 10.0% in November.
In the meantime, the dollar remained pressured after data last Friday showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 93.6, down from January’s final reading of 98.1. Economists had forecast an unchanged figure.
The report came a day after data showing that U.S. retail sales unexpectedly fell 0.8% last month after dropping 0.9% in December, indicating that consumer spending remained sluggish at the start of the year.
Sterling was also lower against the euro, with EUR/GBP gaining 0.41% to 0.7420.
Later on Tuesday, the U.S. is expected to issue data on manufacturing activity in New York State as well as a private sector survey of home builders.
