Pound Falls As Weak UK CPI Data Signals BoE Rate Cut
20 Dezember 2023 - 4:50AM
RTTF2
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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