The British pound weakened against other major currencies in the European session on Wednesday, as U.K. consumer price inflation reached its lowest level in more than two years in November, increased bets for interest-rate cut next year by the Bank of England (BoE).

Data from the Office for National Statistics showed that the consumer price index showed an annual increase of 3.9 percent, slower than the 4.6 percent rise in October. This was the weakest inflation since September 2021 and also below economists' forecast of 4.4 percent.

On a monthly basis, the CPI was down 0.2 percent, following a nil growth in October. Prices were expected to climb 0.1 percent.

Another data from the ONS showed that input prices continued to decline in November. Input prices decreased 2.6 percent annually, the same pace of decline as seen in October.

Month-on-month, the input price index slid 0.3 percent, in contrast to the 0.5 percent rise in October.

At the same time, factory gate prices dropped 0.2 percent following a revised fall of 0.3 percent in October. On month, output prices slid 0.1 percent after rising 0.3 percent a month ago.

The Pound held steady against its major rivals in the Asian session today.

In the European trading now, the pound fell to more than 3-week lows of 0.8668 against the euro and 1.0882 against the Swiss franc, from yesterday's closing quotes of 0.8623 and 1.0958, respectively. If the pound extends its downtrend, it is likely to find support around 0.87 against the euro and 1.07 against the franc.

Against the U.S. dollar and the yen, the pound edged down to 1.2648 and 181.28 from yesterday's closing quotes of 1.2730 and 183.08, respectively. On the downside, 1.22 against the greenback and 178.00 against the yen are seen as the next support levels for the pound.

Looking ahead, Eurozone current account data for October and construction output for October are due to be released in the European session.

In the New York session, U.S. MBA weekly mortgage approvals data and U.S. current account data for the third quarter, existing home sales for November, and U.S. EIA crude oil data are slated for release.

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