Investing.com – The pound surged to a 14-month high against the U.S. dollar on Tuesday, after a U.K. government report showing that consumer prices hit a 28-month high in February bolstered expectations for a near-term rate hike by the Bank of England.
GBP/USD hit 1.6402 during early U.S. trade, the pair’s highest since January 19, 2010; the pair subsequently consolidated at 1.6384, gaining 0.46%.
Cable was likely to find support at 1.6202, Monday’s low and short-term resistance at 1.6514, the high of December 7, 2009.
Earlier in the day, the Office for National Statistics said consumer price inflation rose to 4.4% in February from 4.0% the previous month, outstripping expectations for a 4.2% gain.
The report said that the increase in consumer prices was driven by higher costs for housing, domestic heating bills and clothing.
The pound has rallied this year on the view that the BoE will increase interest rates but uncertainty remains over the timing due to the uneven nature of the U.K. economic recovery.
The pound was also higher against the euro, with EUR/GBP shedding 0.36% to hit 0.8690.
Also Tuesday, a separate report showed that U.K. public sector net borrowing totaled GBP10.2 billion in February, up from GBP8.1 billion for the same month in 2010 and above forecasts for total borrowing of GBP8.0 billion.
GBP/USD hit 1.6402 during early U.S. trade, the pair’s highest since January 19, 2010; the pair subsequently consolidated at 1.6384, gaining 0.46%.
Cable was likely to find support at 1.6202, Monday’s low and short-term resistance at 1.6514, the high of December 7, 2009.
Earlier in the day, the Office for National Statistics said consumer price inflation rose to 4.4% in February from 4.0% the previous month, outstripping expectations for a 4.2% gain.
The report said that the increase in consumer prices was driven by higher costs for housing, domestic heating bills and clothing.
The pound has rallied this year on the view that the BoE will increase interest rates but uncertainty remains over the timing due to the uneven nature of the U.K. economic recovery.
The pound was also higher against the euro, with EUR/GBP shedding 0.36% to hit 0.8690.
Also Tuesday, a separate report showed that U.K. public sector net borrowing totaled GBP10.2 billion in February, up from GBP8.1 billion for the same month in 2010 and above forecasts for total borrowing of GBP8.0 billion.