Investing.com – The euro surged to a fresh five-month high against the pound on Tuesday, after official data showed that U.K. consumer price inflation fell unexpectedly in March, as a decline in the cost of food and drink outweighed higher housing and utility costs.
EUR/GBP hit 0.8890 during European morning trade, the pair’s highest since October 25; the pair subsequently consolidated at 0.8887, surging 0.62%.
The pair was likely to find support at 0.8792, Monday’s low and short-term resistance at 0.8941, the high of October 25.
The Office for National Statistics said consumer price inflation rose by 4.0% last month, its lowest annual rate of increase since January and the first fall in the CPI rate since July last year. Analysts had expected the annual rate to hold steady at 4.4%, a 28-month high reached in February.
The weak data dampened expectations for a near-term rate hike by the Bank of England.
A separate report said that Britain's trade deficit unexpectedly narrowed in February to its smallest since February 2010 at GB6.7 billion. Economists had forecast a deficit of GBP8.1 billion.
The pound was also sharply lower against the U.S. dollar, with GBP/USD shedding 0.63% to hit 1.6243.
Later Tuesday, the U.S. was to release government data on its trade balance and the federal budget balance.
EUR/GBP hit 0.8890 during European morning trade, the pair’s highest since October 25; the pair subsequently consolidated at 0.8887, surging 0.62%.
The pair was likely to find support at 0.8792, Monday’s low and short-term resistance at 0.8941, the high of October 25.
The Office for National Statistics said consumer price inflation rose by 4.0% last month, its lowest annual rate of increase since January and the first fall in the CPI rate since July last year. Analysts had expected the annual rate to hold steady at 4.4%, a 28-month high reached in February.
The weak data dampened expectations for a near-term rate hike by the Bank of England.
A separate report said that Britain's trade deficit unexpectedly narrowed in February to its smallest since February 2010 at GB6.7 billion. Economists had forecast a deficit of GBP8.1 billion.
The pound was also sharply lower against the U.S. dollar, with GBP/USD shedding 0.63% to hit 1.6243.
Later Tuesday, the U.S. was to release government data on its trade balance and the federal budget balance.