The pound rose against its major counterparts in the European session on Wednesday, following the release of a data showing an acceleration in U.K. consumer price inflation in July.
Data from the Office for National Statistics showed that consumer prices climbed 2.1 percent year-on-year in July, faster than the 2 percent increase in June. Inflation was forecast to slow to 1.9 percent.
The rate has climbed back above the BoE’s 2% threshold for the second time this year.
On a monthly basis, consumer prices remained flat, while prices were expected to drop 0.1 percent.
Another report from ONS showed that output price inflation climbed to 1.8 percent from 1.6 percent in June. The rate was larger than the expected 1.7 percent. The annual rate has remained positive since July 2016.
On a monthly basis, output prices gained 0.3 percent compared to a forecast of 0.1 percent rise. Prices had dropped 0.1 percent in June.
At the same time, input price inflation rose to 1.3 percent from 0.3 percent in June. Economists had forecast prices to rise again by 0.3 percent.
On month, input prices advanced 0.9 percent, offsetting June’s 0.8 percent fall.
In a separate communique, the ONS said average house prices increased 0.9 percent year-on-year in June, the same rate as seen in May.
The lowest annual growth was in London, where prices fell 2.7 percent from last year.
The currency has been trading in a negative territory against its major counterparts in the Asian session, excepting the greenback.
The pound edged up to 1.2077 against the greenback from Tuesday’s closing value of 1.2058. The pound is seen finding resistance around the 1.22 level.
The U.K. currency reached as high as 0.9255 versus the euro, following a decline to 0.9276 at 9:50 pm ET. On the upside, 0.90 is possibly seen as the next resistance level for the pound.
Flash estimate from Eurostat showed that Eurozone economic growth halved in the second quarter, as initially estimated.
Gross domestic product grew 0.2 percent sequentially, following the first quarter’s 0.4 percent expansion.
The pound bounced off to 1.1770 against the Swiss franc and 128.65 against the yen, from its early lows of 1.1742 and 128.00, respectively. The next possible resistance for the pound is seen around 1.20 against the Swiss franc and 133.00 against the yen.
Looking ahead, U.S. import and export price indices for July will be featured in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com