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Forex - GBP/USD hits 2-day high as dollar softens after weak CPI

Published 11/18/2010, 02:55 AM
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Investing.com – The pound was up against the U.S. dollar on Thursday, rising to a 2-day high as the dollar softened following the release of worse-than-expected U.S. data on consumer price inflation.

GBP/USD hit 1.5947 during late Asian trade, the pair’s highest since Tuesday; the pair subsequently consolidated at 1.5929, gaining 0.13%.

Cable was likely to find support at 1.5838, Wednesday’s low and a 13-day low and resistance at 1.6086, Wednesday’s high.

On Wednesday, official U.S. data showed that core consumer price inflation, which excludes food and energy costs, was unexpectedly flat in October for the second successive month. Analysts had expected core consumer prices to rise by 0.1% in October.

Consumer prices including food and energy costs rose less-than-expected in October, increasing by 0.2%, after rising by 0.1% in September. Analysts had expected consumer price inflation to rise by 0.3% in October. Also, the annual underlying inflation rate hit 0.6%, the lowest level since records began in 1957.

Elsewhere, a separate report showed that the number of building permits issued in the U.S. rose less-than-expected in October while housing starts fell more-than-expected.

Meanwhile, the pound was down against the euro, with EUR/GBP rising 0.32% to hit 0.8533.

Later in the day, the U.K. was to release official data on retail sales and public borrowing, while the U.S. was to release key data on initial jobless claims as well as a report on manufacturing activity.

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