Investing.com - The pound dipped against the U.S. dollar on Tuesday, following the release of unexpectedly weak U.K. inflation data, while investors awaited testimony on the U.S. economy from Federal Reserve Chairman Ben Bernanke later in the day.
GBP/USD hit 1.5612 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5621, inching down 0.09%.
Cable was likely to find support at 1.5516, Monday’s low and resistance at 1.5712, the high of July 3.
Sentiment on the pound was hit after official data showed that consumer price inflation in the U.K. fell to its lowest in more than two-and-a-half years in June, as retailers offered discounts on clothing and shoes to encourage consumers to spend.
The Office for National Statistics said the annual rate of consumer price inflation dropped to 2.4% from 2.8% in May, the lowest level since November 2009. Economists had expected the rate of inflation to remain unchanged.
The unexpectedly weak data fuelled expectations that the Bank of England is unlikely to exit its monetary easing policy in the near term, after the central bank increased the size of its asset purchase program earlier this month.
Sterling remained supported ahead of testimony by Fed Chairman Ben Bernanke later Tuesday and Wednesday, amid mounting speculation over whether the U.S. central bank head could indicate the need for further economic stimulus.
Expectations for another round of quantitative easing were boosted on Monday after official data showed a third consecutive monthly decline in U.S. retail sales in June.
The pound pulled away from a three-and-a-half year high against the euro, with EUR/GBP easing up 0.16% to 0.7816.
Also Tuesday, the U.S. was to publish official data on consumer price inflation, as well as reports on the capacity utilization rate and industrial production.
GBP/USD hit 1.5612 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5621, inching down 0.09%.
Cable was likely to find support at 1.5516, Monday’s low and resistance at 1.5712, the high of July 3.
Sentiment on the pound was hit after official data showed that consumer price inflation in the U.K. fell to its lowest in more than two-and-a-half years in June, as retailers offered discounts on clothing and shoes to encourage consumers to spend.
The Office for National Statistics said the annual rate of consumer price inflation dropped to 2.4% from 2.8% in May, the lowest level since November 2009. Economists had expected the rate of inflation to remain unchanged.
The unexpectedly weak data fuelled expectations that the Bank of England is unlikely to exit its monetary easing policy in the near term, after the central bank increased the size of its asset purchase program earlier this month.
Sterling remained supported ahead of testimony by Fed Chairman Ben Bernanke later Tuesday and Wednesday, amid mounting speculation over whether the U.S. central bank head could indicate the need for further economic stimulus.
Expectations for another round of quantitative easing were boosted on Monday after official data showed a third consecutive monthly decline in U.S. retail sales in June.
The pound pulled away from a three-and-a-half year high against the euro, with EUR/GBP easing up 0.16% to 0.7816.
Also Tuesday, the U.S. was to publish official data on consumer price inflation, as well as reports on the capacity utilization rate and industrial production.