Pound Weakens As U.K. Inflation Rises Less Than Forecast
14 Novembre 2017 - 6:40AM
RTTF2
The pound slipped against its major rivals in early European
deals on Tuesday, as the U.K. consumer prices grew less than
expected in October and output price inflation slowed further.
Data from the Office for National Statistics showed that the
U.K. consumer prices climbed 3 percent year-on-year in October,
compared to expectations for a 3.2 percent rise.
The index was unchanged from last month.
Month-on-month, consumer prices edged up 0.1 percent versus the
expected growth of 0.2 percent.
Core inflation that excludes energy, food, alcoholic beverages
and tobacco, also held steady at 2.7 percent in October.
Another report from the ONS showed that output price inflation
slowed to 2.8 percent in October from 3.3 percent in September. The
expected rate was 2.9 percent.
On a monthly basis, output prices gained 0.2 percent, the same
rate as posted a month ago.
At the same time, input price inflation eased notably to 4.6
percent in October from 8.1 percent in September. Inflation was
forecast to slow to 4.8 percent.
Input prices climbed 1 percent in October from September, when
they rose 0.2 percent.
European stocks were mostly higher, with encouraging economic
data from Germany and upbeat corporate earnings supporting
sentiment.
Investors looked ahead to European Central Bank's conference in
Frankfurt, where the European Central Bank chief Mario Draghi,
Federal Reserve Chair Janet Yellen, Bank of Japan Governor Haruhiko
Kuroda and Bank of England Governor Mark Carney participate in a
panel discussion titled "At the heart of policy: challenges and
opportunities of central bank communication."
The currency has been trading in a negative territory in the
Asian session.
The pound depreciated to 0.8954 against the euro, its lowest
since October 26. This may be compared to a high of 0.8889 hit at
6:45 pm ET. The next possible support for the pound is seen around
the 0.92 mark.
Data from the Federal Statistical Office showed that Germany's
economic growth accelerated in the third quarter.
Gross domestic product grew 0.8 percent sequentially, faster
than the 0.6 percent expansion logged in the second quarter. The
growth rate was forecast to remain at 0.6 percent.
Pulling away from an early Asian session's peak of 1.3128
against the greenback, the pound edged down to 1.3074. Continuation
of the pound's downtrend may see it challenging support around the
1.29 region.
The pound retreated to 148.78 against the yen and 1.3009 against
the franc, from its early highs of 149.43 and 1.3077, respectively.
If the pound extends slide, 147.00 and 1.29 are likely seen as its
next support levels against the yen and the franc,
respectively.
Looking ahead, U.S. producer prices for October are due in the
New York session.
At 12:30 pm ET, the Bank of England Deputy Governor Jon Cunliffe
speaks at the Oxford Economics Society.
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