Pound Falls After U.K. Inflation Data

(RTTNews) - The British pound weakened against other major currencies in the European session on Wednesday, after data showed that the U.K. consumer price inflation remained unchanged in January, while the rate was forecast to rise.

Data from the Office for National Statistics showed that the consumer price index advanced 4.0 percent on a yearly basis, the same rate as seen in December, while the rate was forecast to rise to 4.1 percent.

Month-on-month, the CPI fell 0.6 percent, in contrast to the 0.4 percent increase in the previous month. Economists had forecast a 0.3 percent drop.

Another data from the ONS showed that input prices posted an annual fall of 3.3 percent annually in January, worse than December's 2.1 percent decrease and economists' forecast of 3.0 percent fall.

At the same time, output prices slid 0.6 percent annually, reversing a 0.1 percent rise in December. Economists had forecast a decline of 0.5 percent.

On a monthly basis, the decline in input prices doubled to 0.8 percent from 0.4 percent. And output prices fell 0.2 percent following a 0.5 percent decrease.

In the Asian trading today, the pound showed mixed trading against its major rivals. While the pound rose against the euro, the U.S. dollar and the yen, it held steady against the Swiss franc.

In the European trading now, the pound fell to an 8-day low of 1.2556 against the U.S. dollar, from an early high of 1.2612. If the pound extends its downtrend, it is likely to find support around the 1.24 area.

Against the yen, the euro and the Swiss franc, the pound dropped to 188.92, 0.8527 and 1.1136 from early highs of 189.83, 0.8498 and 1.1174, respectively. The pound may test support near 184.00 against the yen, 0.86 against the euro and 1.10 against the franc.

Looking ahead, U.K. house price data for December and Eurozone GDP data for the fourth quarter and industrial output for December are slated for release in the European session.

In the New York session, U.S. MBA mortgage approvals data and PPI for December and U.S. EIA crude oil data are set to be published.

At 9:00 am ET, ECB board member Piero Cipollone will participate in CEO Summit organized by Euro Commerce in Brussels, Belgium.

Half-an-hour later, Federal Reserve Bank of Chicago President Austan Goolsbee will participate in a moderated question-and-answer session before the Council on Foreign Relations, in New York, U.S.

At 2:30 pm ET, Bank of Canada Deputy Governor Rhys Mendes will participate in a panel discussion at the Lazaridis School of Business & Economics at Wilfrid Laurier University, in Waterloo, Ontario, in Canada.

At 4:00 pm ET, Federal Reserve Vice Chair for Supervision Michael Barr speaks on "Monetary Policy and Bank Regulation" before the 40th Annual National Association for Business Economics (NABE) Economic Policy Conference, in Washington D.C., U.S.